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Analyzing the determinants of terrorist attacks and their market reactions

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  • Halkos, George
  • Managi, Shunsuke
  • Zisiadou, Argyro

Abstract

The aim of this paper is to explore the determinants of terrorist unexpected events and if these events can affect economic markets. Based on the existing literature and the methodologies already been used, our purpose is to draw some attention to specific events, which may create losses to investors or even to countries. Specifically, after a thoughtful consideration of the existing studies, we discuss a number of empirical findings concerning the main determinants of terrorism. Based on previous research there is a belief that religions and especially fanatics is a very significant determinant of an attack. We show that the more democratic and developed countries are inclined to decrease the spread on the returns. Relying on these empirical findings, we discuss the implied policy implications and the necessary further research.

Suggested Citation

  • Halkos, George & Managi, Shunsuke & Zisiadou, Argyro, 2017. "Analyzing the determinants of terrorist attacks and their market reactions," Economic Analysis and Policy, Elsevier, vol. 54(C), pages 57-73.
    • Handle: RePEc:eee:ecanpo:v:54:y:2017:i:c:p:57-73
    DOI: 10.1016/j.eap.2017.02.002
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    3. Muhammad Tahir & Munshi Naser Ibne Afzal & Muhammad Asim Afridi & Imran Naseem & Bilal Bin Saeed, 2019. "Terrorism and its Determinants in the Sub‐Saharan Africa Region: Some New Insights," African Development Review, African Development Bank, vol. 31(3), pages 393-406, September.
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    More about this item

    Keywords

    Terrorism; Market reactions; Investors; Event study; Religions; Regimes;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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