Impact of information technology (IT) security information sharing among competing IT firms on firm’s financial performance: An empirical investigation

Abstract

Traditionally, IT firms closely guard the management and control of critical information assets. A group of IT firms, however, adopted a different approach and formed an organization with the goal of sharing critical IT security information with industry peers (firms in the same industry that do not directly compete) and competitors to more effectively manage IT security. The inherent vulnerability in sharing critical information with other (potentially competing) firms presents an interesting, coopetition paradox for firms. Drawing from the theoretical foundations of the relational view of the firm that resolves the coopetition paradox, we conducted an empirical test to determine whether security information sharing impacts firm’s financial performance. Our findings suggest that IT firms engaged in interfirm security information sharing outperform their industry peers in terms of operational costs and overall profitability.