Change search
ReferencesLink to record
Permanent link

Direct link
The impact of domestic and international terrorism on equity markets: evidence from Indonesia
Stockholm University, Faculty of Social Sciences, School of Business.
2013 (English)In: International Journal of Accounting and Information Management, ISSN 1834-7649, Vol. 21, no 1, 91-107 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to show that the consequences of terrorist attacks are beyond what is reported in the media. Equity investors can be adversely affected by these incidents. The authors' work justifies the war on terror.

Design/methodology/approach – Using event study methodology, the authors test how abnormal returns have changed for industrial portfolios in Indonesia following the recent terrorist attacks in the USA, the UK, Spain, India and even Indonesia. The authors adjust the CAPM to test whether systematic risks are altered around these events.

Findings – The findings show that equity portfolios were adversely affected by the September 11 attacks and Bali bombings. The domestic terrorist attack generated the worst outcomes. It appears that systematic risk has increased by the amount of terrorist risk. Other attacks in London, Madrid and Mumbai were minimal.

Originality/value – This study shows how domestic and international terrorist events affect the risk and return in an Asian capital market.

Place, publisher, year, edition, pages
2013. Vol. 21, no 1, 91-107 p.
Keyword [en]
Asia, Capital markets, Equity markets, Indonesia, Returns, Systematic risk, Terrorism, Wealth destruction
National Category
Business Administration
Research subject
Business Administration
URN: urn:nbn:se:su:diva-88561DOI: 10.1108/18347641311299768OAI: diva2:612070
Available from: 2013-03-19 Created: 2013-03-19 Last updated: 2013-04-05Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text

Search in DiVA

By author/editor
Graham, Michael
By organisation
School of Business
In the same journal
International Journal of Accounting and Information Management
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 94 hits
ReferencesLink to record
Permanent link

Direct link