Birds of a feather: intra-industry spillover of the Target customer data breach and the shielding role of IT, marketing, and CSR

Kashmiri, Saim; Nicol, Cameron Duncan; Hsu, Li-Yi

doi:10.1007/s11747-016-0486-5

Cited by 70 publications

(44 citation statements)

References 99 publications

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“…Finally, there might be a contagion effect within industries (Zafar, 2012;Kashmiri, Nicol, & Hsu, 2017) with auditors charging higher fees to non-breached firms operating in the same industry. In order to assess whether such a contagion effect exists, we add the following two variables to our regression model: PEER_BREACH, an indicator variable equal to 1 if a cybersecurity incident occurred in the previous fiscal year 12 within a given industry and 0 otherwise;…”

Section: Methodsmentioning

confidence: 99%

Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters

Rosati

Gogolin²,

Lynn³

2019

Int. J. Acc.

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This study investigates the impact of cyber-security incidents on audit fees. Using a sample of 5,687 firms, we find that (i) breached firms are charged 12% higher audit fees, and (ii) firms operating in the same industry of a breached firm are charged 5% higher fees. Finally, using a difference-in-difference regression on a propensity score matched sample, we provide evidence suggesting that auditors do not revise their audit risk assessment following a breach. Overall, these results suggest that the increase in audit fees in the year of a breach is only temporary, and that auditors include cyber-security risk in their audit risk assessment even before an incident occurs. Higher cyber-security risk is ultimately reflected in higher audit fees paid by auditees.

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Section: Methodsmentioning

confidence: 99%

Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters

Rosati

Gogolin²,

Lynn³

2019

Int. J. Acc.

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“…How investors may develop these perceptions has yet to be explained. While studies have examined performance implications of specific CSI events and the contextual factors that affect firm outcomes of CSI (e.g., Godfrey, Merrill, & Hansen, 2009; Groening & Kanuri 2018; Hamilton, 1995; Kang et al, 2016; Kashmiri, Nicol, & Hsu, 2017), internal organizational features such as the composition of a firm's senior leadership that may govern how investors react to CSI has received limited scholarly attention.…”

Section: Introductionmentioning

confidence: 99%

“…A relevant and unbiased signal of a firm's ability to anticipate CSI is how much influence key decision makers have on firm strategy (Greening & Johnson, 1997; Vaughan, 1983). For instance, the influence of IT and marketing personnel in top management teams (TMTs) has been shown to help shield intra‐industry firms from spillover effects of CSI (Kashmiri et al, 2017). A key indicator of prevention may thus be the presence of strategic decision makers who are trained to foresee the potential negative repercussions of firm decisions (Hambrick, Misangyi, & Park, 2015; Sarpong & Maclean, 2014).…”

Section: Introductionmentioning

confidence: 99%

Firms behaving badly? Investor reactions to corporate social irresponsibility

Kanuri

Houston

Andrews

2020

Business and Society Review

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Corporate social irresponsibility (CSI) and other questionable business incidents that appear to harm stakeholders frequently afflict firms yet draw disparate investor reactions. We address this disparity by investigating the association between firm legal orientation and investor reactions to CSI. We hypothesize the proportion of board members and top management team (TMT) executives with law degrees affects investor perceptions of firm foresight, and in turn, their judgment of blame and consequent punishment. Based on abnormal returns to 629 announcements of CSI and 308 publicly traded S&P 500 firms, we find that both too small and too large a proportion of board of directors and TMT members with law degrees lead investors to mete out harsher punishment. This inverted u‐shaped link is further affected by firm size, firm risk, and industry competition. Our investigation sheds light on the link between executive education and financial performance in the context of CSI and investor perceptions of foresight.

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“…A number of studies have examined event-related spillover, but these studies has been conducted outside of a co-branding context and findings have been somewhat contradictory. Specifically, studies have found negative spillover to the competition from negative events (e.g., Borah & Tellis, 2016;Cleeren, Dekimpe, & Helsen, 2008;Cleeren, van Heerde, & Dekimpe, 2013;Dahlén & Lange, 2006;Kashmiri, Nicol, & Hsu, 2017;Roehm & Tybout, 2006), to strategic partners (e.g., Till & Shimp, 1998;Um, 2013;Votolato & Unnava, 2006;Zhou & Whitla, 2013) and in the same portfolio (e.g., Borah & Tellis, 2016;Lei, Dawar, & Lemmink, 2008;Liu & Shankar 2015;Sullivan, 1990;Zhang & Taylor, 2009), whereas others did not detect any spillover to competing companies or brands (Sullivan, 1990). A positive spillover of negative information for competitive brands has even been found (Zhao, Zhao, & Helsen, 2011).…”

Section: Introductionmentioning

confidence: 99%

What if something unexpected happens to my brand? Spillover effects from positive and negative events in a co‐branding partnership

Koschate‐Fischer

Hoyer²,

Wolframm

2019

Psychology and Marketing

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Brands sometimes enter into co‐branding agreements and major events can occur to one of the brands which can have either negative or positive consequences for the brands involved in the partnership. The current study investigates as yet unanswered research questions regarding whether and how positive and negative events happening to one brand in a co‐branding partnership affect the brand equities of the other brands in the partnership. The authors provide and test a new integrated attribution‐diagnosticity framework to explain the process that underlies the magnitude of these spillover effects. Findings show that while positive and negative event‐related spillover effects occur between the co‐brand and both parent brands, they were surprisingly absent between the parent brands. Further, the (a)symmetry of parent brand equity before the event influences the magnitude of event‐related spillover the parent brands receive from the co‐brand. Theoretical and practical implications of these findings are discussed.

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Birds of a feather: intra-industry spillover of the Target customer data breach and the shielding role of IT, marketing, and CSR

Cited by 70 publications

References 99 publications

Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters

Audit Firm Assessments of Cyber-Security Risk: Evidence from Audit Fees and SEC Comment Letters

Firms behaving badly? Investor reactions to corporate social irresponsibility

What if something unexpected happens to my brand? Spillover effects from positive and negative events in a co‐branding partnership

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