Empirical Evidence on the Determinants of Cybersecurity Investments in Private Sector Firms - Journal of Information Security

JIS > Vol.9 No.2, April 2018

Journal of Information Security

Volume 9, Issue 2 (April 2018)

ISSN Print: 2153-1234 ISSN Online: 2153-1242

Google-based Impact Factor: 3.79 Citations

Empirical Evidence on the Determinants of Cybersecurity Investments in Private Sector Firms ()

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Download as PDF (Size: 330KB) PP. 133-153

DOI: 10.4236/jis.2018.92010 2,693 Downloads 5,645 Views Citations

Author(s)

Lawrence A. Gordon¹, Martin P. Loeb¹, William Lucyshyn², Lei Zhou¹

Affiliation(s)

¹Robert H. Smith School of Business, University of Maryland, College Park, MD, USA.
²School of Public Policy, University of Maryland, College Park, MD, USA.

ABSTRACT

Investments in cybersecurity are critical to the national and economic security of a nation. There is, however, a strong tendency for firms in the private sector to underinvest in cybersecurity activities. This paper reports the results of a survey designed to empirically assess whether treating cybersecurity as an important component of a firm’s internal control system for financial reporting purposes serves as a driver for private sector firms to invest in cybersecurity activities. The findings, in this regard, are significantly positive. The study also shows that a firm’s concern over the risk of incurring a large loss due to a cybersecurity breach and the degree the firm treats cybersecurity investments as generating a competitive advantage are drivers of the level of private sector investment in cybersecurity activities. The implications of the empirical results for designing public policies to mitigate the tendency of private sector firms to underinvest in cybersecurity are also explored.

KEYWORDS

Cybersecurity, Investment, Determinants, Survey

Share and Cite:

Gordon, L. , Loeb, M. , Lucyshyn, W. and Zhou, L. (2018) Empirical Evidence on the Determinants of Cybersecurity Investments in Private Sector Firms. Journal of Information Security, 9, 133-153. doi: 10.4236/jis.2018.92010.

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