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Wake up or fall asleep-value implication of trusted computing

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Abstract

More than 10 years have passed since trusted computing (TC) technology was introduced to the market; however, there is still no consensus about its value. The increasing importance of user and enterprise security and the security promised by TC, coupled with the increasing tension between the proponents and the opponents of TC, make it timely to investigate the value relevance of TC in terms of both capital market and accounting performance. Based on both price and volume studies, we found that news releases related to the adoption of the TC technology had no information content. All investors, regardless of whether they are individual investors or institutional investors, or they are wealthy individual investors or less wealthy individual investor, all have similar views on the value of TC. Further, we show that the accounting benefit gained from the adoption of TC is trivial, which might explain the price invariance and volume invariance we observed in the stock market.

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Notes

  1. http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/f-f_factors.html.

  2. Recall that regardless of whether consumers treat TC as favorable or unfavorable, as long as investors have heterogeneous valuation of TC, then we should expect that TC technology related announcements will be associated with increased volume. Hence, trading volume study with confounding events is a conservative test because if we fail to observe an increase in trading volume with confounding events, then it will be even less likely for us to observe a market trading response associated with TC announcement without confounding events.

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Authors and Affiliations

  1. School of Information Systems, Singapore Management University, 80 Stamford Road, Singapore, Singapore

    Nan Hu, Jianhui Huang, Yingjiu Li & Dan Ma

  2. University of Wisconsin Eau Claire, Eau Claire, WI, 54701, USA

    Nan Hu

  3. Department of Accounting and Finance, University of Wisconsin Eau Claire, 105 Garfield Ave., Eau Claire, WI, 54702, USA

    Ling Liu

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  1. Nan Hu
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Correspondence to Nan Hu.

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Hu, N., Huang, J., Liu, L. et al. Wake up or fall asleep-value implication of trusted computing. Inf Technol Manag 10, 177–192 (2009). https://doi.org/10.1007/s10799-009-0060-7

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