The effects of terrorist attacks on inventor productivity and mobility

We investigate the impact of deadly terrorist attacks on inventor productivity and mobility in the U.S. During the five-year window after such events, nearby firms generate fewer and less impactful inventions. Moreover, their inventors typically exhibit a post-attack decline in their patent production, unless they move to a distant company (which some tend to do after an attack). Firms' financial constraints and inventor talent appear to provide channels underlying our productivity and mobility findings, respectively. These results provide novel insights about the impact of shocks that distort the invention process and promote the mobility and reallocation of inventors among firms. •This paper shows that terrorist attacks uniquely affect the invention process.•Firms near terrorist strikes exhibit a large decrease in invention productivity.•Financially constrained firms suffer a more acute drop in invention productivity.•Terrorism promotes the mobility and reallocation of inventors among firms.•Superior inventors are better able to move to firms far from the terrorism scenes.