Assessing the Financial Impacts of the World Trade Center Attacks On Publicly-Held Corporations The Institute for Crisis, Disaster and Risk Management The George Washington University Presented by: John R. Harrald, Ph.D. Research Team : John R. Harrald, Ph.D., Louise K. Comfort, Ph.D., Greg L. Shaw, M.A., CBCP, Doaa Taha, M.S., Damon Coppola, M.E.M., Sarp Yeletaysi, B.S., and Younhee Kim, M.S. Supported by NSF Grant # CMS 0219953 ICDRM
19 terrorists hijacked 4 aircraft for suicide attacks
Almost 3000 people killed
In Manhattan: - 34.5 million ft 2 office space lost
- $50-70 billion in insured losses
Most of these direct economic losses were incurred by the private sector
September 11, 2001 The WTC burning… The twin towers collapsed…
Terrorist Groups are Targeting U.S. And World Economy “ The settlement of this overburdened account will indeed be heavy. We will also aim to continue, by permission of Allah, the destruction of the American economy.” Ayman Al-Zawahiri, head of Al-Qaeda operational planning (6 October, 2002)
Selection of Companies www.tenantwise.com GOAL: To sort through the thousands of companies that had been directly affected by the attacks in order to formulate a list of between 20 and 25 companies to be studied
9/11 events inflicted severe and immediate physical impacts to all businesses, government offices, and other organizations located in and around the WTC complex.
Affected companies needed to manage, primarily by themselves, an event that involved dead, injured, missing, physically displaced and traumatized employees, losses of data, information, and institutional knowledge, and an unprecedented uncertainty in market behavior.
For the vast majority of large, publicly traded companies directly impacted by the WTC attacks, it appears that the bulk of financial impacts were absorbed by the markets/industries rather than the individual companies themselves and therefore transferred quickly to the economy as a whole.
Risk behavior of the majority of companies was not altered to a significant degree by the 9/11 attacks
There have emerged implications showing that there exist mechanisms to absorb or transfer severe economic and financial impacts of large-scale disasters affecting large businesses.
Determine what caused discrepancies between the outliers, and confirm our findings regarding market absorption of financial loss,
Investigate strategic impact on corporations not directly impacted by WTC attack (20-25 companies) and compare with sample companies.
Personal Interviews (40-60)
ICDRM What was in place? What was improvised? How was it used? How did it work? What was learned? What was modified or changed? Pre Event Response/ Post Event Recovery Framework for Analysis of Strategic Impacts Revised Corporate Strategy Investments in preparedness
Expected Results Unique evaluation of financial impacts of WTC attacks on large corporations. Evaluation of corporate preparedness, disaster recovery and business continuity strategies Procedures, and technology. Better understanding of impact of extreme events on corporate strategy, plans, and investment.
Questions? References for used Images: satellite.jpg - http://256.com/gray/thoughts/2001/20010912/pictures/ newyork.jpg - http://www.allposters.com/gallery.asp?aid=426124&item=337506 P1010018.jpg, P1010021.jpg - www.sikh.net/AOA/wtcpics.htm alive.jpg, search3.jpg http://economics.wustl.edu/~e110em/disaster/ IM001017.jpg - http://www.markallencam.com/nycblowup.html before007.jpg - http://groundzero.nyc.ny.us/photos/before/before007.html image002.jpg - http://www.twin-towers.net/before.htm For additional information contact John R. Harrald at [email_address] , (202) 994-7153 www.gwu.edu/~icdrm