Abstract
The use of big data analytics (BDA) and related technologies by firms can raise concerns regarding data privacy and security (DPS). In this study, with stock return and risk as indicators of firm performance, we investigate how DPS investment affects the financial performance of BDA firms (firms with BDA investment) and non-BDA firms (firms without BDA investment). We use a difference-in-differences approach and apply the propensity score matching to 1400 DPS announcements made by 228 US firms whose stocks are publicly traded on US stock markets from 2004 to 2018. The main findings are as follows: (1) On average, DPS investment significantly reduces firms' systematic risk. (2) The risk reduction effects are greater for non-BDA firms than for BDA firms. Our results indicate that DPS investment reduces firm risk and that the business value of specific information technology (IT) investment (e.g., DPS) is influenced by firms' other IT assets (e.g., BDA). The present findings advance the literature on the business value of IT and firms' IT portfolio management in digitized business environments.
| Original language | English |
|---|---|
| Article number | 113543 |
| Journal | Decision Support Systems |
| Volume | 146 |
| DOIs | |
| Publication status | Published - Jul 2021 |
| Externally published | Yes |
Keywords
- Big data
- Data Privacy
- Data Security
- Event study
- IT investment
- IT risk
ASJC Scopus subject areas
- Management Information Systems
- Information Systems
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Information Systems and Management