Information sharing and the bane of information leakage: a multigroup analysis of contract versus noncontract

The financial impacts of information systems security breaches on publicly traded companies: reactions of different sectors

Purpose

Today, information systems and technology provides a wide set of tools for companies to increase the efficiency of their businesses. Although technology offers many benefits to businesses, it also brings risks as the information systems security breaches. Security breaches and their financial impact is a constant concern of the researchers and practitioners. This paper explores information systems breaches and their financial impacts on the publicly traded companies in different sectors.

Design/methodology/approach

After a comprehensive data collection process, data from 192 events are analyzed by employing Event Study Methodology and a comparison of the results between the four highly affected sectors (Consumer Goods, Technology, Financial and Communications) is presented. The abnormal returns on the prices of stocks after the events are calculated with the Market Model. Also, the results of the Market Adjusted Model and Mean Adjusted Model are presented to support the results.

Findings

While information systems security breaches have a significant negative impact on the Financials and the Technology sectors for all the event windows in the study ([−5, 0], [−5, 1], [−5, 5], and [−5, 10]), the significant negative impact is observed only on the [−5, 5] and [−5, 10] event windows for the Consumer Goods sector. No significant negative impact is observed in the Communications sector, in fact, the cumulative abnormal returns are positive for this sector.

Originality/value

The contribution of this paper to provide evidence about the financial impacts of the information systems breaches for businesses in different sectors. While there are studies that have previously focused on the information systems breaches and their financial impacts on businesses, to the best of our knowledge, this is the first study that compares this effect between the four highly impacted sectors. With a relatively larger sample size and broader event windows than the past studies in the literature, statistical evidence is provided to managers to justify their investments in information security and build preventive measures to secure the market value of their firms.

Understanding the link between IS capabilities and cost performance in services: the mediating role of supplier integration

Purpose

The purpose of this study is to explore the link between information systems (IS) capabilities, supplier integration and cost performance in the service context. Specifically, it empirically investigates how supplier integration meditates the relationship between three dimensions of IS capabilities and cost performance in service firms.

Design/methodology/approach

A survey of 156 UK service firms was conducted and the data analyzed to determine the role of supplier integration in mediating the effects of IS capabilities on firms' cost performance. The research model was tested using structural equation modeling (SEM), and the neural network model was used to rank the relative influence of significant predictors obtained from SEM.

Findings

The results confirmed that supplier integration fully mediates the effects of information technology (IT) for supply chain activities and flexible IT infrastructure on cost performance and partially mediates the effect of operations manager's IT knowledge on cost performance. The results showed that operations manager's IT knowledge is the strongest predictor of supplier integration.

Originality/value

This study takes a step toward quelling concerns about the business value of IS, contributing to the development and validation of the measurement of IS capabilities in the service operations context. Additionally, it adds to the emerging body of literature linking supplier integration to the operational performance of service firms.