Skip to main content

Research Repository

Advanced Search

Does Terrorism Affect Acquisitions?

Nguyen, Tung; Petmezas, Dimitris; Karampatsas, Nikolaos

Does Terrorism Affect Acquisitions? Thumbnail


Tung Nguyen

Nikolaos Karampatsas


Using terrorist attacks as an exogenous shock to uncertainty, we provide evidence that firms located near terrorism-stricken areas are less likely takeover targets for two years after the attack and receive lower acquisition premiums. The latter finding is reflected in lower target firm abnormal returns and synergy gains. Additionally, in terrorism-stricken areas, target firms are associated with a lower share of synergies, withdrawn deals rise, and acquirers are more likely to get involved in acquisitions of target firms located in different metropolitan statistical areas than their own or acquire faraway target firms. We attribute our results to the real options theory, which predicts that high uncertainty increases the value of the option to delay investments. Additionally, we show that the impact on target firm human capital and acquirer CEO uncertainty and fear are potential sources of terrorism-induced uncertainty with the former source prevailing over the latter.


Nguyen, T., Petmezas, D., & Karampatsas, N. (2023). Does Terrorism Affect Acquisitions?. Management Science, 69(7), 4134-4168.

Journal Article Type Article
Acceptance Date Jan 20, 2022
Online Publication Date Aug 8, 2022
Publication Date 2023-07
Deposit Date Feb 4, 2022
Publicly Available Date Feb 4, 2022
Journal Management Science
Print ISSN 0025-1909
Electronic ISSN 1526-5501
Publisher Institute for Operations Research and Management Sciences
Peer Reviewed Peer Reviewed
Volume 69
Issue 7
Pages 4134-4168
Public URL


You might also like

Downloadable Citations