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- W4283734412 endingPage "103" @default.
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- W4283734412 abstract "Purpose This study aims to investigate the effects of firm- and governance-specific characteristics on digital trust (DT) and firm value. Firm-specific factors include return on assets (ROA), market-to-book ratio (M/B ratio), size and leverage, whilst governance-related factors comprise board size, percentage of female board members, board independence and institutional ownership. All listed US firms over the period of 2011–2016 were analysed in this study. Design/methodology/approach This study provides a novel method to empirically measure DT by combining multiple variables to create a combined DT score. The variables include security and privacy scores, security rankings and data breaches, amongst others. Subsequently, a linear regression was performed to evaluate the effect of firm- and governance-specific characteristics on DT, as well as the effect of DT on firm value. Findings By using signalling theory, this study finds significant evidence that a firm’s profitability (ROA) decreases whilst its size increases DT. This could be due to the fact that firms with lower DT monetise data more actively, decrease DT and increase short-term profitability. Significant evidence also shows that increasing DT leads to an increase in firm value. Originality/value Although numerous studies have been conducted on developing customers’ trust by incorporating corporate social responsibility to improve firm value, the literature remains still on its digital analogue. Therefore, this study extends the knowledge of corporate digital responsibility (CDR) by providing a novel method for calculating DT across industries as an antecedent of CDR. Specifically, it sheds light on how firms can enhance DT by utilising firm- and governance-level factors. This enhanced DT can subsequently increase firm value. The study provides important managerial implications by providing empirical evidence that cybersecurity investments increase firm value. This value increase is related to the rise in shareholder value amongst investors and the increase in the organisation’s consumer perceptions as the latter’s interests are better managed." @default.
- W4283734412 created "2022-07-01" @default.
- W4283734412 creator A5057232328 @default.
- W4283734412 creator A5083068510 @default.
- W4283734412 creator A5084511255 @default.
- W4283734412 date "2022-07-04" @default.
- W4283734412 modified "2023-09-30" @default.
- W4283734412 title "The impact of digital trust on firm value and governance: an empirical investigation of US firms" @default.
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