Do Terrorist Attacks Make Inventors More Risk Taking?

Luo, Yue; Chen, Yangyang; Lin, Ji‐Chai

doi:10.2139/ssrn.3321554

Cited by 5 publications

(4 citation statements)

References 51 publications

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“…Around 60% of people could not go to work due to a significant decline in economic activities in India (OECD, 2020). Even after the lockdown ended, reemployment was a challenge, and it changed people's financial behavior (Luo et al, 2020). Uncertainties during the lockdown were the reason for the high volatility in the markets during the pandemic, as various biases clouded the judgement of the individuals (Kathpal & Siddiqui, 2021).…”

Section: Discussionmentioning

confidence: 99%

Predicting the financial behavior of Indian salaried-class individuals

Mulasi

Mathew

Desai

2022

Investment Management and Financial Innovations

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COVID-19 has caused not only unprecedented health crises but also economic crises among individuals across the world. White-collar (salaried-class) employees with a fixed salary face financial insecurity due to job loss, pay cuts and uncertainty in retaining a job. This study examines the financial behavior of Indian white-collar salaried-class investors to their cognitive biases. In addition, the mediating effect of financial self-efficacy on cognitive biases and financial behavior is examined. Respondents were given structured questionnaires (google forms) through emails and WhatsApp for data collection. SPSS and R-PLS are used to analyze the data. Conservatism (r = –.603, p &lt; 0.05) and herding bias (r = –.703, p &lt; 0.05) have a significant negative correlation with financial behavior. Financial self-efficacy has a significant positive correlation (r =.621. p &lt; 0.050). Conservatism and herding predicted 60.5% and 62.2% of the variance, respectively. The direct and indirect paths between conservatism bias, financial self-efficacy, and financial behavior are significant. The paths between herding, financial self-efficacy and financial behavior are also significant. Acknowledgement The authors express their sincere gratitude to Dr Suresha B (Associate Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India ) for encouraging and motivating them to accomplish this research task. The authors also extend their sincere thanks to Prof. Krishna T.A. (Assistant Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India) and Dr Sridevi Nair (Assistant Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India) for their support throughout this empirical investigation.

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Section: Discussionmentioning

confidence: 99%

Predicting the financial behavior of Indian salaried-class individuals

Mulasi

Mathew

Desai

2022

Investment Management and Financial Innovations

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“…This is mainly because a security guard discovered the bomb before exploding and cleared most of the people out of the park. Such an attack is contained and under control, and can be considered as a small attack (Luo et al ., 2019).…”

Section: Sample and Methodologymentioning

confidence: 99%

“…In a current working paper, Luo et al . (2019) find that big terrorist attacks, which result in more than one casualty, make local investors, who live within a 100‐mile radius of the attacked areas, less innovative, while investors who live within a 100‐mile radius of a small terrorist attack become more innovative. However, researchers do find a consistent result concerning the economic consequence of terrorism.…”

Section: Related Literature and Hypothesis Developmentmentioning

confidence: 99%

Terrorism and Corporate Tax Avoidance

Moser

2021

Abacus

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We examine the impact of terrorism risk on corporate tax avoidance. We find that firms headquartered in areas with a higher terrorism risk engage in more corporate tax avoidance. Further, we show that terrorism risk has a greater impact on corporate tax avoidance when terrorist attacks are severe in terms of the targets hit, damage, and the numbers of victims. Tests on channels show that higher terrorism risk is associated with firms suffering greater financial constraints. We provide evidence that increased terrorism risk is also associated with the reallocation of US Internal Revenue Service budgeted expenditures away from tax return audit enforcement and towards increased funding for the Internal Revenue Service Criminal Investigative Division combating terrorism. We conclude that terrorism risk increases and facilitates the corporate demand for tax savings.

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“…Terrorist attacks, as unanticipated negative shocks to the environment where firms operate, could affect firms’ relationships with their major customers for several reasons. First, terrorist attacks introduce uncertainty to corporate operations by suppressing market demand (Becker and Rubinstein, 2004), disrupting value chains (Czinkota et al., 2010), reducing employee productivity (Luo et al., 2020), and increasing external financing costs (Abadie and Gardeazabal, 2008). Terrorism-induced uncertainty can adversely affect firms’ fundamentals and undermine their capability to sustainably fulfill obligations to their customers.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Terrorist Attacks on Supplier–Customer Relationships

Tan,

Wang,

Zhang

2024

Production and Operations Management

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We examine the causal effects of nearby terrorist attacks on supplier–customer relationships. We find that for supplier firms located near terrorist attacks, the probability of relationship termination with their major customers increases by 2.9 percentage points within two years following the attacks. The major customers’ intensified perceptions of supply chain risk largely drive the relationship termination. Further analyses show that major customers tend to switch to suppliers with lower terrorism risks after they end their relationships with the suppliers near attacks. This study provides new insights into the consequences of terrorism by extending the focus to the response of a key stakeholder group (i.e., trade partners) instead of the attack-afflicted firms per se.

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Do Terrorist Attacks Make Inventors More Risk Taking?

Cited by 5 publications

References 51 publications

Predicting the financial behavior of Indian salaried-class individuals

Predicting the financial behavior of Indian salaried-class individuals

Terrorism and Corporate Tax Avoidance

The Effects of Terrorist Attacks on Supplier–Customer Relationships

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