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This paper aims to investigate who causes post‐announcement drift and whether this drift is observed for various types of news announcements.

Using Finnish share ownership data, the authors examine the trading behavior of foreign and domestic investors during the post‐announcement periods of scheduled earnings and unscheduled non‐earnings announcements.

The results show that the post‐announcement drift exists for both types of news, but only if the news is negative. As a group, foreign investors react first by selling shares of firms reporting negative information. Domestic investors act in the opposite manner.

The results imply that the post‐announcement drift is a special case of a more general post‐disclosure phenomenon and that investor differences (most likely information processing skills) is one likely explanation for its pervasiveness.

Pakistan suffered with the menace of terrorism for long and become a front line state in the “War on Terror”. Terrorism shattered Pakistan economy and rendered her external sector vulnerable to instability and uncertainties.

Therefore, using system generalized method of moment (GMM), this paper investigates the impact of foreign direct investment (FDI) on exports, imports and trade deficit in the face of unabated terrorism in Pakistan.

The findings of the paper suggest that as terrorism in Pakistan increased, FDI contribution to Pakistan exports decreased while FDI contribution to Pakistan imports significantly increased. Terrorism also disrupted the chain of local production and increased Pakistan reliance on imports. Thus terrorism widened Pakistan trade deficit of Pakistan and expose Pakistan to external imbalances.

Despite rise in organized acts of terrorism and its adverse impact on various departments of economy, hardly any study bothers to check its impact on trade and investment nexus. This is the first study of its nature that looks deep down to understand how terrorism affects the relation of major economic variables.