Examining the Shareholder Wealth Effects of Announcements of Newly Created CIO Positions

Chatterjee, Debabroto; Richardson, Vernon J.; Zmud, Robert W.

doi:10.2307/3250958

Cited by 295 publications

(215 citation statements)

References 36 publications

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“…Regression analysis is a common econometric tool to model relationships between variables and used by prior event studies such as [28] and [13]. The regression model can be specified as…”

Section: Regression Analysismentioning

confidence: 99%

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An Empirical Analysis of the Impact of Software Vulnerability Announcements on Firm Stock Price

Telang

Wattal

2007

IIEEE Trans. Software Eng.

187

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Abstract-Security defects in software cost millions of dollars to firms in terms of downtime, disruptions, and confidentiality breaches. However, the economic implications of these defects for software vendors are not well understood. Lack of legal liability and the presence of switching costs and network externalities may protect software vendors from incurring significant costs in the event of a vulnerability announcement, unlike such industries as auto and pharmaceuticals, which have been known to suffer significant loss in market value in the event of a defect announcement. Although research in software economics has studied firms' incentives to improve overall quality, there have not been any studies which show that software vendors have an incentive to invest in building more secure software. The objectives of this paper are twofold. 1) We examine how a software vendor's market value changes when a vulnerability is announced. 2) We examine how firm and vulnerability characteristics mediate the change in the market value of a vendor. We collect data from leading national newspapers and industry sources, such as the Computer Emergency Response Team (CERT), by searching for reports on published software vulnerabilities. We show that vulnerability announcements lead to a negative and significant change in a software vendor's market value. In our sample, on average, a vendor loses around 0.6 percent value in stock price when a vulnerability is reported. We find that a software vendor loses more market share if the market is competitive or if the vendor is small. To provide further insight, we use the information content of the disclosure announcement to classify vulnerabilities into various types. We find that the change in stock price is more negative if the vendor fails to provide a patch at the time of disclosure. Also, more severe flaws have a significantly greater impact. Our analysis provides many interesting implications for software vendors as well as policy makers. In particular, our study provides some evidence of the value of secure software.

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“…Regression analysis is a common econometric tool to model relationships between variables and used by prior event studies such as [28] and [13]. The regression model can be specified as…”

Section: Regression Analysismentioning

confidence: 99%

“…We also explore different values of the event window. 13. R it for a stock is the percent change in the stock price at time t, ð¼ P it À P it1 Þ=P it1 .…”

Section: Telang and Wattal: An Empirical Analysis Of The Impact Of Somentioning

confidence: 99%

An Empirical Analysis of the Impact of Software Vulnerability Announcements on Firm Stock Price

Telang

Wattal

2007

IIEEE Trans. Software Eng.

187

View full text Add to dashboard Cite

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“…기존 전략적 동맹이나 인수합병 관 련 연구는 i) 두 지배구조가 상이함에도 불구 하고 이를 호환적(interchangeable)으로 일반 화하여 사용하는 연구 [16,25], ii) 둘 가운데 하나의 지배구조에만 초점을 둔 연구 [20,22] 률은 다음과 같이 계산하였다 [21,37]. [4,37]. …”

Section: 서 론unclassified

Analyzing the Effects of Knowledge Resource Complementarity Structures on the Choice between Strategic Alliances and Merge and Acquisitions (M&As) in Information Technology Industries

Choi¹

2014

The Journal of Society for e-Business Studies

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The information technologies industry is now experiencing a rebirth of strong stable growth. However, very few studies have examined performance implications of strategic alliance or merger and acquisition from a knowledge-based view. Furthermore, none of these studies have investigated resource complementarities and alliance or merger and acquisition motive as potential sources of firm performance. This paper extends upon current knowledge-based literature to discover and explore linkages between resource complementarities and firm performance of strategic alliances or merger acquisitions. This study finds that strategic alliance and merger and acquisition announcements have provided abnormal positive returns of production alliances and merger and acquisition. This study can be used as a stepping stone for selection of strategic alliance or merger and acquisition.

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“…Similarly, research has shown that investments in IT experience and ecommerce technologies result in positive reactions from investors (Chatterjee et al 2001;Guan et al 2006;Dehning et al 2006). Of particular note is the Dehning et al (2006) study that demonstrates positive performance effects from the use of ITbased supply chain management systems within the manufacturing sector.…”

Section: Establishing Measurement Criteriamentioning

confidence: 99%

Accounting for Collaborative Supply Chain Relationships: Issues and Strategies

Sutton¹,

Smedley²,

Arnold³

2008

IJDAR

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Abstract. The purpose of this discussion paper is to explore the contemporary business model that has arisen with the advent of B2B e-commerce systems in order to better understand the improvements needed in the financial reporting model. The contemporary business model has relegated the enterprise-centric view of corporate competition and the current financial reporting model to insignificance in many instances. Rather, today's business environment is one dominated by competition between supply chains with an organization's success ultimately hinging on the viability and success of its supply chain partners as much as, or more than, enterprise-centric policies and decisions. As a result, these highly integrative systems connect supply chain partners in a manner that is more tightly coupled than most consolidated entities. Still, the current financial reporting model fails to even minimally capture the complexity of this new reality. This discussion paper provides the foundation for elaborating on a detailed discussion of how this business model could be more accurately captured through an enhanced business reporting model.

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Examining the Shareholder Wealth Effects of Announcements of Newly Created CIO Positions

Cited by 295 publications

References 36 publications

An Empirical Analysis of the Impact of Software Vulnerability Announcements on Firm Stock Price

An Empirical Analysis of the Impact of Software Vulnerability Announcements on Firm Stock Price

Analyzing the Effects of Knowledge Resource Complementarity Structures on the Choice between Strategic Alliances and Merge and Acquisitions (M&As) in Information Technology Industries

Accounting for Collaborative Supply Chain Relationships: Issues and Strategies

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