IT risk factor disclosure and stock price crashes
department or school: Business, Sauder School of
department or school: Management Information Systems, Division of
data provider: DSpace
degree campus: UBCV
creator: Song, Victor Xiao Peng
issued: 2020-04-23T20:41:00Z
issued: 2020
related degree: Master of Science - MSc
degree grantor: University of British Columbia
description: As business strategies of many firms and their value creation activities are increasingly more dependent on Information Technology (IT), 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 a text-mining approach of 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 increases a firm’s future stock price crash risk. We use grounded theory to further separate IT risk factor disclosures into two broad 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 cyber security risk that could lead to a loss or leak of data. We find that while the impact of cyber security risk disclosure on a firm’s future crash risk is significant, IT value risk disclosures do not have a significant impact. We also find that the readability, position, and novelty of the IT risk factor disclosure strengthen the relation between the disclosure and the firm’s stock price crash risk.
aggregated CHO: https://circle.library.ubc.ca/rest/handle/2429/74131
note: IT RISK FACTOR DISCLOSURE AND STOCK PRICE CRASHES by Victor Xiao Peng Song B.ASc., The University of British Columbia, 2015 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS ADMINISTRATION in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Management Information Systems) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) April 2020 © Victor Xiao Peng Song, 2020 ii The following individuals certify that they have read, and recommend to the Faculty of Graduate and Postdoctoral Studies for acceptance, a thesis entitled: IT RISK FACTOR DISCLOSURE AND STOCK PRICE CRASHES submitted by Victor Xiao Peng Song in partial fulfillment of the requirements for the degree of Master of Science in Business Administration in Management Information Systems Examining Committee: Dr. Hasan Cavusoglu, Associate Professor, Accounting and Information Systems Division, Sauder School of Business Co-supervisor Dr. Gene Moo Lee, Assistant Professor, Accounting and Information Systems Division, Sauder School of Business Co-supervisor Dr. Ira Yeung, Assistant Professor, Accounting and Information Systems Division, Sauder School of Business Supervisory Committee Member iii Abstract As business strategies of many firms and their value creation activities are increasingly more dependent on Information Technology (IT), 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 a text-mining approach of 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 increases a firm’s future stock price crash risk. We use grounded theory to further separate IT risk factor disclosures into two broad categories: IT value risk that relates to a firm’s …
has type: Thesis/Dissertation
date issued: 2020-05
is shown at: 10.14288/1.0389950
language: eng
degree discipline: Business Administration - Management Information Systems
provider: Vancouver : University of British Columbia Library
publisher: University of British Columbia
rights: Attribution-NonCommercial-NoDerivatives 4.0 International
rights URI: http://creativecommons.org/licenses/by-nc-nd/4.0/
scholar level: Graduate
type: Text
identifier URI: http://hdl.handle.net/2429/74131