International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

 

The Impact of Terrorist Attacks on the Capital Market in the Last Decade
Tchai Tavor

Abstract
Over the last decades, terrorism has become a global phenomenon which almost every society finds itself exposed to her from time to time. Terrorist organizations operate under common principles that can be called a terrorist strategy. Terrorist phenomenon, significantly affects the lives of citizens in different countries all over the world. In this study I tried to examine how terrorist events affect the capital market in general and the event characters, when the test for TA-100 index, was examined in the Israeli capital market. In the study I examined five tests:1. general impact of the terrorist event, 2. impact of event by location in relation to the green line, 3. impact of event by location within the green line, 4. comparison of terrorist events with fatalities to terrorist events without fatalities, 5. comparison of terrorist attacks with the IDF's response to terrorist events and without the IDF's response. From the research results we can see that terrorist events affect financial markets, but their influence is not uniform. The location of the event, the intensity of the event and the response after it, will determine the intensity of the impact of the event on the capital market.

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