Effect of terror attaks on the bond and stock market of European countries
It is proven by behavioral economics that negative sentiment can have an influence on the decisions made by investors. In this research the effects of terror attacks on the stock and bond market of five Western European countries is investigated. To study these effects panel data is used. The countries are the United Kingdom, Belgium, France, Germany, and Spain. The time span of the research is 1994-2014. In the research a significant effect is found on the bond market of those countries. For the stock market there is no significant effect. Larger attacks have a significant positive effect on stock and bond market, if the attack happened in the tested country there is no significant effect on either the stock or bond market. Another result that is found is that different targets of the terror attack have different impacts on the stock and bond market.
Faculteit der Managementwetenschappen