Core and Periphery -- The Dual Effect of Terror
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In this paper we analyze the impact of terrorist attacks conducted in Israel during the Second Intifada (2000-2006) on the Israeli stock market. The impact is assessed by differentiating between attacks in the center of Israel (what is termed here the core region) and attacks in the periphery (the southern and northern areas of the country). We use the event study technique to evaluate the effects of the attacks on abnormal returns on the Israeli stock market. Our major finding is that a terrorist attack in the center of Israel has a significant negative effect on the stock market on the day it happens and a significant cumulative negative effect for several days afterward. However, when the attack takes place in the periphery, it has a less significant effect and no lasting impact after the first day.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Research Paper
- Socio-Economic Development and Violence: An Empirical Application for Seven Metropolitan Areas in Colombia
- Military Expenditures and Human Development: Guns and Butter Arguments Revisited: A Case Study from Egypt
- Core and Periphery -- The Dual Effect of Terror
- Preventing Mass Killings: Determining the Optimal Allocation of Security Resources between Crowded Targets
- Lone Wolf Terrorism
- Predation and Production in a Core-Periphery Model: A Note
- Media Freedom and Socio-Political Instability
- The Political Economy of the Creeping Militarization of U.S. Foreign Policy
- A Database on the Mozambican Civil War
- Letter
- 2010 Lewis Fry Richardson Lifetime Achievement Award: Ron P. Smith and the Economics of War and Peace
- Commitment among Fighters: A Research Note
- List of Referees/Reviewers 2011
Articles in the same Issue
- Research Paper
- Socio-Economic Development and Violence: An Empirical Application for Seven Metropolitan Areas in Colombia
- Military Expenditures and Human Development: Guns and Butter Arguments Revisited: A Case Study from Egypt
- Core and Periphery -- The Dual Effect of Terror
- Preventing Mass Killings: Determining the Optimal Allocation of Security Resources between Crowded Targets
- Lone Wolf Terrorism
- Predation and Production in a Core-Periphery Model: A Note
- Media Freedom and Socio-Political Instability
- The Political Economy of the Creeping Militarization of U.S. Foreign Policy
- A Database on the Mozambican Civil War
- Letter
- 2010 Lewis Fry Richardson Lifetime Achievement Award: Ron P. Smith and the Economics of War and Peace
- Commitment among Fighters: A Research Note
- List of Referees/Reviewers 2011
