Publication Type

Journal Article

Version

publishedVersion

Publication Date

5-2022

Abstract

Information security and data breaches are perhaps the biggest challenges that global businesses face in the digital economy. Although data breaches can cause significant harm to users, businesses, and society, there is significant individual and national variation in people’s responses to data breaches across markets. This research investigates power distance as an antecedent of people’s divergent reactions to data breaches. Eight studies using archival, correlational, and experimental methods find that high power distance makes users more willing to continue patronizing a business after a data breach (Studies 1–3). This is because they are more likely to believe that the business, not they themselves, owns the compromised data (Studies 4–5A) and, hence, do not reduce their transactions with the business. Making people believe that they (not the business) own the shared data attenuates this effect (Study 5B). Study 6 provides additional evidence for the underlying mechanism. Finally, Study 7 shows that high uncertainty avoidance acts as a moderator that mitigates the effect of power distance on willingness to continue patronizing a business after a data breach. Theoretical contributions to the international business literature and practitioner and policy insights are discussed.

Keywords

privacy, power distance, data breach, ownership, uncertainty avoidance, experiments

Discipline

Marketing

Research Areas

Marketing

Publication

Journal of International Business Studies

Volume

54

Issue

4

First Page

731

Last Page

754

ISSN

0047-2506

Identifier

10.1057/s41267-022-00519-5

Publisher

Palgrave Macmillan

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1057/s41267-022-00519-5

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