Terrorism activities and long-term annual management forecasts

Yuyuan Chang, Augustine Duru, Yangyang Fan, Christo Pirinsky, Mikhail Pevzner

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (Scopus)


We study the effects of terrorist attacks on firms’ long-term annual management earnings forecasts bias. We find that the managers of firms located closer to the epicenters of attacks are more likely to issue optimistic long-term annual earnings forecasts relative to the managers of a control group of unaffected firms. The exposure effect is stronger for more severe terrorist events, and firms with more uncertain fundamentals and less geographic diversification. In addition, we document that managers’ forecast optimism intensifies for firms with stronger negative stock market reaction to the terrorist event, for CEOs with higher ability and for companies that are more likely to issue equity or engage in acquisitions following the terrorist event. Overall, our results are consistent with the idea that long-term annual earnings forecasts are used by managers to counterbalance the short-term pessimistic response to terrorist attacks.

Original languageEnglish
Article number106943
JournalJournal of Accounting and Public Policy
Issue number3
Publication statusPublished - 1 May 2022


  • Forecast horizon
  • Investor sentiment
  • Management forecasts
  • Terrorist attacks

ASJC Scopus subject areas

  • Accounting
  • Sociology and Political Science


Dive into the research topics of 'Terrorism activities and long-term annual management forecasts'. Together they form a unique fingerprint.

Cite this