The European Journal of Comparative Economics

ISSN: 1824-2979

EJCE Year: 2021, June. Volume: 18 - Issue: 1

The financial costs of terrorism: evidence from Germany

by Jamal Bouoiyour, Refk Selmi

Start page: 87 - End page: 104

Keywords: Terrorism, The German stock market, Sectoral-level analysis

DOI: 10.25428/1824-2979/202101-87-104

Abstract:

Although the physical and emotional costs of terrorism are widely known, the financial price of terror attacks is still obscure. This paper seeks to examine the heightened uncertainty surrounding terror attacks across the two Germany’s largest and most visited cities (in particular, Berlin and Munich) to shed some light on the reactions of disaggregated German stock market to those unforeseen events. We robustly find that the impact of terrorism varies across sectors. The Berlin attack causes substantial German stock price moves. The airline, hotels, leisure and communication services were harmfully influenced to those events. Nevertheless, the banking and financial services and defense were weakly affected. More importantly, the German stock market has proven a sharp resilience and a prompt and efficient adaptation. The investors’ cognizance of the Germany’s modern greatly diversified, and highly competitive economy and the higher institutional quality have allowed to appropriately dealing with adverse consequences associated with terrorist attacks.

View this article (PDF)

In case of problems please write an e-mail to secretariat.ejce@liuc.it

Publisher perpetually authorizes participants in the LOCKSS system to archive and restore EJCE articles through the LOCKSS System for the benefit of all LOCKSS System participants. EJCE is registered as OAI-PMH data provider. OAI - Records check.
EJCE, 2018-    : Registro stampa Trib. Busto Arsizio n. 7/18 del 13.07.2018; Direttore responsabile: Piero Cavaleri, Università Carlo Cattaneo - LIUC c.so Matteotti 22 20153 Castellanza VA
EJCE, 2004-2017: Supplemento a LIUC Papers, Registro stampa Trib. Busto Arsizio n. 11/93 del 11.06.1993; Direttore responsabile: Piero Cavaleri, Università Carlo Cattaneo - LIUC c.so Matteotti 22 20153 Castellanza VA