IT Risk Factor Disclosure and Stock Price Crashes Song, Victor Cavusoglu, Hasan Lee, Gene Moo Ma, Li Zhi 2020-01-04T08:26:10Z 2020-01-04T08:26:10Z 2020-01-07
dc.description.abstract As firms are increasingly more dependent on Information Technology (IT) for their business strategies and value creation activities, risks associated with IT become one of the top concerns for corporate boards and managers. This study examines the impact of IT-related risk factor disclosure in Item 1A of the 10-K annual report on stock price crashes. We use Latent Dirichlet Allocation topic modeling to identify risk categories in risk disclosures between 2006 and 2017. IT risk emerged as one of the key risk categories. We find that IT risk disclosure is positively correlated with a firm’s future stock price crash risk. We further separate IT risk factor disclosures into two categories: IT value risk that relates to a firm’s use of and reliance on information technology for its operations to reach its goals and objectives, and cybersecurity risk that could lead to a loss or leak of data. We find that while the correlation between cyber security risk disclosure and a firm’s future crash risk is significant, IT value risk disclosures do not have a significant correlation.
dc.format.extent 7 pages
dc.identifier.doi 10.24251/HICSS.2020.738
dc.identifier.isbn 978-0-9981331-3-3
dc.language.iso eng
dc.relation.ispartof Proceedings of the 53rd Hawaii International Conference on System Sciences
dc.rights Attribution-NonCommercial-NoDerivatives 4.0 International
dc.subject Strategy, Information, Technology, Economics and Society (SITES)
dc.subject cyber security
dc.subject it risk disclosure
dc.subject it value
dc.subject lda
dc.subject risk disclosure
dc.title IT Risk Factor Disclosure and Stock Price Crashes
dc.type Conference Paper
dc.type.dcmi Text
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