DOI
https://doi.org/10.25772/H55J-VE68
Defense Date
2006
Document Type
Dissertation
Degree Name
Doctor of Philosophy
Department
Information Systems
First Advisor
Dr. Ojelanki K. Ngwenyama
Second Advisor
Dr. Kweku-Muata Osei-Bryson
Abstract
Researchers in various business disciplines use the event study methodology to assess the market value of firms through capital market reaction to news in the public media about the firm's activities. Capital market reaction is assessed based on cumulative abnormal return (sum of abnormal returns over the event window). In this study, the event study methodology is used to assess the impact that two important information technology activities, Internet security breach and ecommerce initiative, have on the market value of firms. While prior research on the relationship between these business activities and cumulative abnormal return involved the use of regression analysis, in this study, we use decision tree induction and regression.For the Internet security breach study, we use negative cumulative abnormal return as a surrogate for damage to the breached firm. In contrast to what has been reported in the research literature, our results suggest that the relationship between cumulative abnormal return and the independent variables for both the Internet security breach and ecommerce initiative studies is complex, often involving conditional interactions between the independent variables. We report that the incomplete contract theory is unable to effectively explain the relationship between cumulative abnormal return and the organizational variables. Other ecommerce theories provide support to the findings from our analysis. We show that both attack and firm characteristics are determinants of damage to breached firms.Our results revealed that the use of decision tree induction presents additional insight to that provided by regression models. We illustrate that there is value in using data mining techniques to study the market value of e-commerce initiative and Internet security breach and that this approach has applicability in other domains and that Decision Tree can enhance the event study methodology.We demonstrate that Decision Tree induction can be used for both theory building and theory testing. We specifically employ Decision Tree induction to test and enhance ecommerce theories and develop a theoretical model for cumulative abnormal return and ecommerce. We also present theoretical models for Internet security breach and damage to the breached firm. These models can be used by decision makers in Internet security and ecommerce investments strategic formulations and implementations.
Rights
© The Author
Is Part Of
VCU University Archives
Is Part Of
VCU Theses and Dissertations
Date of Submission
June 2008