How Mergers and Acquisitions Increase Data Breaches: The Moderating Role of Diversity
by
Huigang Liang
Professor
FedEx Chair of Excellence in MIS
Department of Business Information and Technology
Fogelman College of Business and Economics
University of Memphis
Friday, Mar 25
11:00 am – 12:30 pm
In-person: 1810 Liacouras Walk, Room 420
Abstract:
This study examines how M&As of a firm influence its data breach recurrence (number of breaches). Based on complexity theory, we propose that M&As increase data breaches and this effect is contingent on the M&A diversity (dissimilarity between the parent and target firms). Our analysis based on the 17-year panel data (2004-2020) of the 5072 public firms in the United States lends strong support for our hypotheses. First, we find that more M&A events by a firm lead to more occurrences of breach events. Second, we show that if the acquired firm is dissimilar to the parent firm in terms of business domains, the number of data breaches are amplified. Furthermore, we explore the mechanisms through which M&As influence data breach recurrence from three perspectives: structural change associated with M&A, M&A type (vertical vs. horizontal), and M&A media publicity (number of news). Our analyses demonstrate that M&As that increase structural complexity of the firm, are vertical, or have attracted a higher level of media attention suffer from more data breaches than their counterparts. This study not only confirms the impact of M&As on data breach recurrence but also unveils various underlying mechanisms of this impact, thus making a significant contribution to both research and practice in information systems.
Bio:
Huigang Liang is FedEx Chair of Excellence in IS at Fogelman College of Business and Economics, University of Memphis. His research interests include socio-behavioral, managerial, and strategic information technology issues at both individual and organizational levels in a variety of contexts. His work has appeared in MIS Quarterly, Information Systems Research, Journal of MIS, Journal of AIS, MIT Sloan Management Review, Communications of the ACM, Decision Support Systems, Information Systems Journal, and Journal of Strategic Information Systems, among other publications. He has served as associate editor for MISQ and is currently senior editor for JAIS and associate editor for ISR and Information & Management.