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The Impact Of Terrorism On Financial Markets: Evidence From Asia

Author

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  • FAHEEM ASLAM

    (Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan)

  • AMIR RAFIQUE

    (Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan)

  • ANEEL SALMAN

    (Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan)

  • HYOUNG-GOO KANG

    (Department of Finance, Hanyang University Business School, Seoul, South Korea)

  • WAHBEEAH MOHTI

    (Department of Management Sciences, Muhammad Ali Jinnah University, Islamabad, Pakistan)

Abstract

This paper examines the impact of 410 terrorist attacks on the performance of five Asian stock markets. The empirical findings indicate that terrorism has a significant impact on the stock markets. Furthermore, the magnitude of these effects varies with respect to country, attack type, target type and severity of the attacks. In target type, terrorist attacks on business sector and security forces are particularly destructive for the stock markets. Likewise, in attack type, suicide attacks and bomb blasts particularly generate a significant downward movement in the stock markets. Furthermore, the more severe attacks have larger negative impact on market returns.

Suggested Citation

  • Faheem Aslam & Amir Rafique & Aneel Salman & Hyoung-Goo Kang & Wahbeeah Mohti, 2018. "The Impact Of Terrorism On Financial Markets: Evidence From Asia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1183-1204, December.
    • Handle: RePEc:wsi:serxxx:v:63:y:2018:i:05:n:s0217590815501118
    DOI: 10.1142/S0217590815501118
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    Cited by:

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    2. Aslam Faheem & Awan Tahir Mumtaz & Mohmand Yasir Tariq & Kang Hyoung-Goo & Mughal Khurrum Shahzad, 2021. "Stock Market Volatility and Terrorism: New Evidence from the Markov Switching Model," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 27(2), pages 263-284, May.

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