The stock market effects of Islamist versus non-Islamist terror

Arbeitspapier

We are the first to analyze the effect of terror on stock markets by terror ideology. Surprisingly, we find that Islamist terror attacks created significant negative abnormal returns in American and European markets, but the stock market effects of other terror attacks were almost nil. For our sample of all 124 terrorist attacks in the US and Europe in the period 1994 to 2018 that caused at least five fatalities or ten injured people, we show that Islamist terror attacks are given significantly more air time (also after controlling for attack characteristics and the media pressure of competing news stories). This, however, explains only part of the differential effect of Islamist attacks on the stock markets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 45

Classification and Topics

• Classification: Wirtschaft ; Conflict; Conflict Resolution; Alliances; Revolutions ; National Security; Economic Nationalism ; General Financial Markets: General (includes Measurement and Data) ; Behavioral Finance: General‡ ; National Security and War
• Subject: Terror ; stock market ; event studies ; Islamist terror ; media

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jin, Gan ; Karima, Md Rafiul ; Schulze, Günther G.
• Event: Veröffentlichung
• (who): University of Freiburg, Department of International Economic Policy (iep)
• (where): Freiburg i. Br.
• (when): 2024

Further information

• Handle: http://hdl.handle.net/10419/284359
• Last update: 10.03.2025, 11:42 AM CET