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Terrorism Activities Influence on Financial Stock Markets: An Empirical Evidence from United Kingdom, India, France, Pakistan, Spain and United States

Author

Listed:
  • Shazaib Butt
  • Omar Masood
  • Kiran Javaria

Abstract

The study investigats the impact of terrorism activities on five economies (Developing and Developed) financial stock markets. Spain, United Kingdom, India, Pakistan, America and France were chosen for the analysis. The variables considered were terrorist activities and market return of the financial stock markets. Daily time series data for the period from 1st Jan 2001 to 31st Dec 2018 was analyzed by applying simple linear regression model to estimate the effects of terrorist activities on financial stock market returns of the selected countries. The results suggest that the market return is affected by the terror events and the model is overall statistically significant. The results of this study are consistent with findings of Freytag et al. (2009) and Basuchoudhary and Shughart (2010). Significant influence of terrorist activities on financial market returns offer financial markets stakeholders not only an understanding of the direction of market swing following terror factors on stock market but also offers guidance towards investment decision making and timing. Study further discussed how terrorism activities influence the overall market return.

Suggested Citation

  • Shazaib Butt & Omar Masood & Kiran Javaria, 2020. "Terrorism Activities Influence on Financial Stock Markets: An Empirical Evidence from United Kingdom, India, France, Pakistan, Spain and United States," Global Journal of Social Sciences Studies, Online Science Publishing, vol. 6(1), pages 1-12.
    • Handle: RePEc:onl:gjosss:v:6:y:2020:i:1:p:1-12:id:532
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    Cited by:

    1. Anatolijs Kriviņš & Jānis Teivāns-Treinovskis & Vladas Tumalavičius, 2021. "Issues of state and national security: Religiously inspired terrorism in the Baltic States: internal and external factors," Post-Print hal-03583775, HAL.
    2. Anatolijs Kriviņš & JÄ nis TeivÄ ns-Treinovskis & Vladas TumalaviÄ ius & Vladas TumalaviÄ ius, 2021. "Issues of state and national security: Religiously inspired terrorism in the Baltic States: internal and external factors," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 3(1), pages 65-79, March.
    3. 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.
    4. Le Dinh Hac & Dinh Tran Ngoc Huy & Nguyen Ngoc Thach & Bui Minh Chuyen & Pham Thi Hong Nhung & Tran Duc Thang & Tran Tuan Anh, 2021. "Enhancing risk management culture for sustainable growth of Asia commercial bank -ACB in Vietnam under mixed effects of macro factors," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 291-307, March.

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