Abstract
This paper aims to verify the impact of information security (IS) investment on firm value. More specifically, we focus on the number of IS countermeasures, and conduct empirical analyses based on Japanese quantitative statistical data. Today, IS investment has been a vital component of business activity. Extant studies have addressed the matter of IS investment from various angles. For example, studies have explored the cost of IS breaches, the relationship between IS investment and vulnerability of information systems, the relationship between IS investment and firm value. However, to the best of our knowledge, issues about the relationship between IS investment and firm value have not been entirely clarified so far; therefore, further studies are now needed. Thorough this study, we obtained two main items of empirical evidence: The number of IS countermeasures have a significant positive association with the firm value as measured by Tobin's q; stock markets evaluate a firm's IS countermeasure as intangible asset rather than the firm's experience of IS trouble. These results not only contribute to the frontiers of the academic domain but also support recent government policies which address the issues of IS.
