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Corporate Disclosures After The Eptember 11 Terrorist Attacks

Author

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  • Myojung Cho
  • John Shon
  • Yuan Xie

Abstract

We examine the actions that insurance firms take immediately after the September 11 attacks to reduce information asymmetries. We find that voluntary disclosure behavior is positively related to the magnitude of the September 11-related loss. Conditioning for the loss, disclosure behavior also systematically varies with firm leverage. However, these disclosures do not seem to impact the bid-ask spreads of the disclosing firms, perhaps because of the higher levels of uncertainty related to the extreme nature of the attacks. The study sheds light on the reactions of management during crisis events and the effect (or lack thereof) of such actions on firms’ information environment.

Suggested Citation

  • Myojung Cho & John Shon & Yuan Xie, 2009. "Corporate Disclosures After The Eptember 11 Terrorist Attacks," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 3(2), pages 169-174.
    • Handle: RePEc:ibf:ijbfre:v:3:y:2009:i:2:p:169-174
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    More about this item

    Keywords

    Corporate disclosure; terrorist attacks; bid-ask spread; crisis management;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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