On the (In)sensitivity of a Stock Market to Terrorism: Turkish Experience

Mustafa YILDIRIM

doi:https://doi.org/10.21121/eab.2018237359

Article Details

On the (In)sensitivity of a Stock Market to Terrorism: Turkish Experience

Authors:

Mustafa YILDIRIM

Publisher:

Ege University

Main Topics:

Economics and Finance

Journal:

Ege Academic Review 2018 Vol.18 Issue 2, pp.169-178

Document Type:

Article

Publication Date:

3/2018

Document Language:

English

Document ID (Org No.):

2000950804

Frequency:

Quarterly

pISSN:

1303-099X

DOI:

https://doi.org/10.21121/eab.2018237359

Abstract:

 


This paper investigates the impact of terrorism that

took place within Turkish borders on the Turkish

stock market by utilizing the daily time series of

terror attacks and the benchmark stock index

between 2000 and 2015. The terror data taken from

the Global Terrorism Database distinguishes itself in

several aspects, including location, attack types, the

number of attacks, the number of victims killed, and

the number of victims injured. It is shown that the

stock market became desensitized to terror attacks

over time. The sensitivity that is observed for the

period of 2000-2004 is lost for the remaining period

of 2004-2015. The sensitivity period includes the

2001 financial crisis of Turkey after which various

financial reforms were implemented. Hence, the lost

sensitivity over the 2004-2015 period is considered

to be associated with the changing state of the

financial system. Moreover, it is found that the

location of an attack is unimportant for the stock

market. However, when attacks are classified into

types based on tactics used during the attack, it is

shown that the stock market is negatively sensitive

to terrorism only when the attack type is facilities/

infrastructure. Since the conclusions are based on

Turkey, they might have broader implications for 

developing countries.

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Article Details

On the (In)sensitivity of a Stock Market to Terrorism: Turkish Experience

Authors: Mustafa YILDIRIM

Publisher: Ege University

Main Topics: Economics and Finance

Journal: Ege Academic Review 2018 Vol.18 Issue 2, pp.169-178

Document Type: Article

Publication Date: 3/2018

Document Language: English

Document ID (Org No.): 2000950804

Frequency: Quarterly

pISSN: 1303-099X

DOI: https://doi.org/10.21121/eab.2018237359

Issues

Authors:

Mustafa YILDIRIM

Publisher:

Ege University

Main Topics:

Economics and Finance

Journal:

Ege Academic Review 2018 Vol.18 Issue 2, pp.169-178

Document Type:

Article

Publication Date:

3/2018

Document Language:

English

Document ID (Org No.):

2000950804

Frequency:

Quarterly

pISSN:

1303-099X

DOI:

https://doi.org/10.21121/eab.2018237359