Financial markets and terrorism

Eldor, Rafi; Melnick, Rafi

doi:10.1016/s0176-2680(04)00032-1

Cited by 50 publications

(67 citation statements)

References 5 publications

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“…For instance, Eldor and Melnick (2004) analyze how stock and foreign exchange markets react to terror that occurs in Israel. Abadie and Gardeazabal (2003) estimate the economic costs of the terrorist conflict in the Basque Country in Spain.…”

Section: Literature Reviewmentioning

confidence: 99%

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

Gerlach

Yook

2016

Pacific-Basin Finance Journal

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We examine the response of foreign investors to escalating political conflict and its impact on the South Korean stock market surrounding 13 North Korean military attacks between 1999 and 2010. Using domestic institutions and domestic individuals as benchmarks, we evaluate the trading behavior and performance of foreign investors. Following attacks, foreigners increase their holdings of Korean stocks and buy more shares of risky stocks. Performance results show foreigners maintain their pre-attack level of performance while domestic individuals, who make the overwhelming majority of domestic trades, perform worse. In addition, domestic institutions improve their performance. Overall, the results are consistent with the predictions based on the benefits of international diversification. Unlike domestic individuals, foreigners trade more shares than usual and deviate from their general strategy of positive feedback trading.

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Section: Literature Reviewmentioning

confidence: 99%

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

Gerlach

Yook

2016

Pacific-Basin Finance Journal

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“…Compared with the work by Chen and Siembs (2004), this study covers a much wider range of terrorist events (77 versus 7) and applies not only the traditional event-study approach, but more rigorous econometric techniques such as the non-parametric methodology and the filtered GARCH-EVT approach. Eldor and Melnick (2004) study how stock and foreign exchange markets react to terrorism in Israel. The authors consider 639 terror attacks during the period from 1990 to 2003 and categorize the data by location, target, type of attack and number of casualties.…”

Section: Related Researchmentioning

confidence: 99%

“…Among existing research, this empirical paper is one of the very few (see for example Arin et al, 2008;Chen and Siembs, 2004;Eldor and Melnick, 2004;Karolyi and Martell, 2006) that study the link between terrorism and the behavior of stock markets. It is also the first one that analyzes the impact on bond and commodity markets.…”

Section: Introductionmentioning

confidence: 99%

The impact of terrorism on financial markets: An empirical study

Chesney¹,

Reshetar²,

Karaman³

2011

Journal of Banking & Finance

336

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The main focus of this paper is to previous termstudynext term empirically the previous termimpact of terrorismnext term on the behavior of stock, bond and commodity previous termmarkets.next term We consider terrorist events that took place in 25 countries over an 11-year time period and implement our analysis using different methods: an event-previous termstudynext term approach, a non-parametric methodology, and a filtered GARCH-EVT approach. In addition, we compare the effect of terrorist attacks on previous termfinancial markets with the impactnext term of other extreme events such as previous termfinancialnext term crashes and natural catastrophes. The results of our analysis show that a non-parametric approach is the most appropriate method among the three for analyzing the previous termimpact of terrorism on financial markets.next term We demonstrate the robustness of this method when interest rates, equity previous termmarketnext term integration, spillover and contemporaneous effects are controlled. We show how the results of this approach can be used for investors' portfolio diversification strategies against previous termterrorismnext term risk.

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“…A substantial literature on terror includes the edited volume by Brück and Wickström (2004); in particular, Chen and Siems (2004) and Eldor and Melnik (2004) have studied how Islamic terror has affected capital markets. In another branch of investigation, Yetman (2004) and Franck et al (2005) have addressed the problems and moral dilemmas of defense against terror when terrorists in a population cannot be identified with certainty.…”

Section: Introductionmentioning

confidence: 99%

Economic and security consequences of supreme values

Hillman

2007

Public Choice

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Islamic societies have in contemporary times lagged Western societies in income, growth, and human-development indicators. The supreme values of radical Islam further de-prioritize economic achievement and impose self-deprivation on own populations. This paper investigates the reasons for economic outcomes under Islam. Contemporary illustrations are also provided of the self-deprivation predicted from pursuit of the supreme-value objectives of radical Islam. The self-deprivation is placed in a rent-seeking context. Copyright Springer Science+Business Media, LLC 2007Radical Islam, Institutions, Economic growth, Supreme values, Rent seeking, Rent protection, Oil wealth, Gender relations, Demographic contestability, Cultural relativism, Personal security, O1, Z12, N35,

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Financial markets and terrorism

Cited by 50 publications

References 5 publications

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

The impact of terrorism on financial markets: An empirical study

Economic and security consequences of supreme values

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