Zhuang, Yunhui, Yunsik Choi, Shu He, Alvin Chung Man Leung, Gene Moo Lee, Andrew B. Whinston (2020) “Understanding Security Vulnerability Awareness, Firm Incentives, and ICT Development in Pan-Asia“. Journal of Management Information Systems, 37(3): 668-693.
- Funded by the US National Science Foundation (Award #1718600) and the Hong Kong Policy Innovation and Coordination Office (2015.A1.030.16A)
- Best WIP Runner-Up Award at WITS 2017
- Presented in WITS 2017 (Seoul, Korea), WEIS 2018 (Innsbruck, Austria), BIGS 2018 (San Francisco, CA), and HICSS 2020 (Maui, HI)
- Media coverage: [UBC Sauder] [Phys.org] [Science Daily] [UConn Today] [Security.com]
- Research assistants: Markus Iivonen, Mark Varga
- Previous titles:
- Information Disclosure and Security Vulnerability Awareness: A Large-Scale Randomized Field Experiment in Pan-Asia
- Information Disclosure and Security Policy Design: A Large-Scale Randomization Experiment in Pan-Asia
This paper investigates how the awareness of a security vulnerability index affects firms’ security protection strategy and how the information awareness effect interacts with firm incentives and country-wide IT development level. The security index is constructed based on outgoing spams and phishing website hosting, which may serve as an indicator of a firm’s security controls. To study whether security vulnerability awareness causes firms to improve their security, we conducted a randomized field experiment on 1,262 firms in six Pan-Asian countries and regions. Among 631 randomly selected treated firms, we alerted them of their security vulnerability index and their relative rankings compared to their peers via advisory emails and websites. Difference-in-differences analyses show that compared with the controls, the treated firms improve their security over time, with a statistically significant reduction of outgoing spam volume according to one of the data sources but not phishing website hosting. However, a statistically significant reduction in phishing website hosting was observed among non-web hosting firms, suggesting that firms’ underlying incentives play an important role in the treatment effect. Lastly, exploiting the multi-country nature of the data, we found that firms in countries with high information and communications technology (ICT) development are more responsive to our intervention because they have higher IT capabilities and more resources to resolve security issues. Our study provides cybersecurity policymakers with useful insights on how firm incentives and ICT environments play roles in firms’ security measure adoption.