Have you ever wondered what happens to businesses when there is a terrorist attack? Do they have to close? Do they lose money? A terrorist attack is a violent act that is intended to cause fear and panic. Terrorist attacks can have a significant impact on businesses, both in the short-term and the long-term.  

In a 2022 article published in the Journal of Accounting Public and Policy, Dr. Mikhail Pevzner and his co-authors set out to explore the effects of terrorist attacks in a paper titled “Terrorism activities and long-term annual management forecasts.” This work has been awarded the Merrick School of Business' Outstanding Article of the Year Award." 

The researchers’ empirical analysis relied on data from multiple sources. They obtained data on terrorist activities from the Global Terrorism Database. They excluded all non-U.S. cases and all low-impact cases without human injuries or deaths to focus on important attacks. In addition, to ensure that their results are not contaminated by successive cases, they excluded a terrorist attack if the corresponding metropolitan area has experienced a terrorist attack during the previous 240 days. Consequently, they include 69 terrorist events in the sample for the period of 1997 to 2018.

“Our article highlights the role of emotions in both investor decisions and how managers react to negative emotional events in anticipation of the investors' emotional reactions, said Pevzner.” It emphasizes behavioral aspects of firms' disclosure policies and the potential importance of considering emotions in interpreting managerial disclosures.”  

Prof. Pevzner has been working on disclosure research since graduate school. It is a topic he is quite interested in and has been pursuing rigorously for about ten years. Along with disclosures, his research interests include empirical archival capital markets research, empirical archival auditing, disclosures, and international accounting and finance. His expertise has afforded him special roles at the U.S. Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). As of this publication date, he is an expert financial economist for the SEC’s Division of Economic and Risk Analysis. Over the years he has also worked as a visiting economist and a visiting academic fellow at the SEC and a visiting academic fellow at FINRA’s Office of Chief Economist. 

Dr. Pevzner is a Porfessor of Accounting, holds the Merrick School of Business’ EY Chair in Accounting and is the Director of Graduate Business Programs. Through the years, Pevzner also has had several appointments at FINRA and the Securities Exchange Commission.

Article citation: 

Chang, Y., Duru, A., Fan, Y., Pirinsky, C., & Pevzner, M. (2022). Terrorism activities and long-term annual management forecasts. Journal of Accounting and Public Policy, 41(3).