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The proliferation of terror threats in the past decades and the increasing number of terror incidents at different locations around the world have engendered a counter reaction from the members of the international community. This study aims to examine how terror incidents that happened over the past decade have affected the capital markets of the targeted countries and whether the effect was permanent or transitory.

To examine the incident’s effect, the study uses the TI (variable) index – a measure of pessimism with values ranging from 5 to 16 – for four days around a terrorist incident. By using this index, this study can reflect the investors’ level of pessimism resulting from the intensity of the terrorist incident. Five parameters that have a major influence on the incident’s severity have been used to construct the index.

By using the terror index, terror incidents were analyzed in four main tests. The results point at the following conclusions: There is a correlation between the yield index on the day of a terror incident and the two following work days. There is a negative correlation between the severity of the event and the yield indices. On the day of the terror incident, there is no difference in yield indices between large and small countries and between democratic and authoritarian countries. Developing countries, however, show a steeper decline than developed countries. In larger and developed countries, terror incidents are permanent, whereas in democratic countries, they are transitory.

This study investigates the effect of terrorism on the stock markets of different countries with relation to the country’s size, type of regime and level of development. The work is based on a unique sample of terror attacks. The study offers a quantitative index to measure the level of pessimism that contains different components of an incident, such as the location of the incident and the type of terrorism.

The purpose of this paper is to address the corporate governance implications of the US terror‐free investment screens, instituted both legislatively and voluntarily, on the operations of non‐US multinational corporations (MNCs) concerning international trade and foreign direct investment with nations designated as “State Sponsors of Terrorism.”

After a brief introduction to the issue of “terror‐free lists” and investment indexes and divestment screens, the paper summarizes the US Federal and State Laws pertaining to state sponsors of terrorism and their direct impact on international trade and investment transactions. The third section evaluates the success of environmental, social, and governance (ESG) indexes and investment screens compared to standard market investment indexes. The fourth section discusses the potential effects of terror‐free stock indexes and divestment (“social”) screens on corporate governance of non‐US corporations. In the final section, the paper offers business policy recommendations concerning international trade and foreign direct investment decisions and the listing of equity stock on the US financial market exchanges, and offer scholarly research questions addressing this issue.

Non‐US MNC managers should recognize, first, the importance of global corporate citizenship and reputation; second, the expansion of terror‐free investing criterion in ESG investment indexes and divestment screens; and third, the growth in the number of state government prohibitions on investing funds with foreign MNCs complicit with terror‐sponsoring states.

Exploratory in nature, this seminal paper evaluates an issue of emerging importance to non‐US MNC managers and directors concerned with potential political and economic repercussions of their international trade and foreign direct investment decisions.

The purpose of this paper is to analyze the relationship between host country (HC) language skills, fear of terror, and cross-cultural adjustment (CCA) of expatriates based in host countries with different terrorist threat levels.

Integrating the expatriate adjustment framework by Black et al. (1991) with social identity theory-based literature, this study first, theorizes about the effects of both fear of terror and HC language proficiency on CCA and, second, puts forward the moderating effect of the actual terrorist threat level on the relationship between HC language proficiency and fear of terror. Hypotheses are tested using survey data of 116 expatriates based in host countries with different threat levels.

HC language proficiency is positively associated with CCA. Yet, it is also positively associated with fear of terror, which is, in turn, negatively related to CCA. Consequently, the beneficial effect of HC language skills on CCA is reduced in environments where expatriates experience significant fear of terror. While the actual threat level has a direct positive effect on fear of terror, it also positively moderates the relationship between HC language proficiency and fear of terror.

This study extends prior literature on expatriation to dangerous environments by zooming in on a specific type of risk factor associated with international assignments, i.e., terrorism, and by integrating HC language proficiency and fear of terror as important factors, which may influence CCA in contexts in which expatriates experience significant fear of terror.

The fundamental idea that we seek to establish in this chapter is that the establishment of regional or local, peace calls forth global peace. In other words, our argument is that local and regional conflicts are partly driven by global factors, especially what is commonly known as international tension. In order to achieve meaningful and sustained peace, there is a reason to believe that it is mandatory to manage and contain international tensions. The main thesis of this chapter is to explain or posit, conflicts as a product of continuing international chasms, splits and differences of political and social ideologies in our modern world. Thus, we argue that conflicts are, to some extent, driven by international tension or global, ideological and geo-political factors. Notwithstanding the global influence, local factors – such as income inequality, income growth or lack of it, political institutions – can and do exacerbate conflicts and a peaceful resolution of conflicts becomes a difficult phenomenon.

The main objective of this research is to investigate if there is a long-term relationship between “terrorism” and sustainable “economic growth” in Big Ten Countries.

The data was tested via Panel ARDL Analysis. The growth rate (GR) is the dependent variable, and the “Global Terror Index (GTI)” is the independent variable as the terror indicator. The ratio of Foreign Direct Investment (FDI) to the Gross Domestic Product (GDP), and the ratio of External Balance (EB) to Gross Domestic Product (GDP) are included in the model as the control variables due to their effect on the growth rate. A Panel ARDL analysis is conducted to examine the existence of long-term co-integration between terror and the economy. The planning of the study, the formation of its theoretical and conceptual framework, and the literature research were carried out in 2 months, and the collection of data, the creation of the methodology and the analysis of the analyzes were carried out in 2 months, the interpretation of the findings and the development of policy recommendations were carried out within a period of 1 month. The entire study was completed in a total of 5 months.

Results showed that “Terror” has a negative impact on “Growth Rate” in the long term while “External Balance” and “Foreign Direct Investment” positively affect the Growth Rate. The coefficients for the short term are not statistically significant.

The sample is only limited to Big Ten including China, India, Indonesia, South Korea, Argentina, Brazil, Mexico, Turkey, Poland and South Africa. The period for annual data collection covers the years between 2002 and 2019 and due to the unavailability of data.

Considering the risks and the mutual negative effect that turns into a vicious circle between terrorism and the economy, it is necessary to eliminate the problems that cause terrorism in the mentioned countries, on the one hand, and to develop policies that will improve economic performance on the other.

Trustful law enforcement bodies have to be established and supported by all technological means to prevent terror. The conditions causing terror have to be investigated carefully and the problems causing terror or internal conflict have to be solved. International cooperation against terrorism has to be strengthened and partnerships, information, experience sharing have to be supported at the maximum levels.

It is certain that terror might have a negative influence on the performance of economies. But the limited number of studies within this vein and the small size of their sample groups mostly including single-country case studies require conducting a study by using a larger sample group of countries. Big Ten here represents at least half of the population of the world and different regions of the Globe.

A widely accepted belief indicates that terror activities have negative impact on stock markets. Contrary to numerous empirical studies, the purpose of this paper is to consider this issue from another point of view in the sense that markets can become desensitized to terror.

Here, instead of directly analyzing the existing data, the stochastic nature of the events is taken into consideration.

The author compares three countries and found out that the correlation between terror and stock markets is almost nil when terror events become a commonplace.

This paper applies mean reverting stochastic processes to terror incidents and brings out interesting results.

Terrorism dates back to the uprising against the Roman Empire in first century BC and the term entered Western literature during the eighteenth century. Conceptually, it has emerged as a security problem in a national and international context. However, terrorism is not only a security problem but also has significance on political, social, cultural, psychological, and especially economical aspects. A weak economic structure of a country makes it easier for terrorist organizations to manipulate its society in a certain direction. Issues such as economic growth, foreign trade, employment, foreign investments, and public expenditures are first affected by terror incidents, and thereafter are known to have medium- and long-term effects. In general, it is observed that developed countries are less affected from terror incidents than developing countries. In this context, in this study, regional assessments will be made using the following indicators: the Global Terror Index (GTI), gross domestic product (GDP), export, foreign investments, and public expenditure. Regional and intercontinental assessments will be implemented using spatial econometric techniques. The GeoDa package program will assess the diversity in terrorism between continents. Our main hypothesis is that terrorism’s economic effect is more in developing countries and the Middle East than among other developed countries. The other aim of the study is to determine which terrorism is more effective and which economic indicator is more affected and gives the best result about effects of the terrorism on the countries and continents. This study predominantly tries to examine whether terror incidents are most influential on the economies in the Middle East region.

This research intends to determine the role of terrorism in defying foreign direct investment (FDI) in top terror effected economies.

Panel data on FDI and terrorism from top terror effected economies spanning from 1987 to 2018 were used and the relationship for whole sample was investigated. Later the sample period was divided into pre (1987–2001) and post 9/11 (2002–2018) subsample and same relationship was tested to investigate the normalization of terror effect on FDI. The method of Pooled Mean Group (PMG) was used to test the hypothesis.

The results showed a negative but statistically insignificant impact of terrorism on the FDI inflows in the long run. Later the sample period was divided into pre (1987–2001) and post 9/11 (2002–2018) subsample. The empirical estimates for pre and post 9/11 periods indicated a negative and statistically significant relationship between terrorism and FDI for pre 9/11 period, and a negative but statistically insignificant relationship between the two variables for post 9/11 period.

The findings suggest several important policy implications for the terror affected countries and are further discussed in the study.

This article discusses the work of the Global Peace Index and how peace itself can be characterized in order to analyze its relationship with society. This article explores the various notions and definitions of peace which exist, such as the differences between “Positive Peace” and “Negative Peace.” Peace cannot simply be thought of as “the absence of violence,” there are many complex aspects to take into consideration and which influence the creation of peaceful societies, including political stability, economics, types of government, and business environments, to name but a few.

This study aims to examine the impact of terrorism on return and systematic risk of Pakistan’s equity industries. Daily data from 1 January 2000 to 31 December 2014 for 12 industries based on the specific types of companies listed on Karachi Stock Exchange are used for the empirical analysis.

A multiplicative (additive) term is introduced in the standard capital asset pricing model to examine the change in systematic risk (industry returns) in response to the terrorist activities. The authors use the multiscale beta approach (Yamada, 2005) and the maximal overlap discrete wavelet transform (MODWT) to test the heterogeneous market hypothesis.

Terrorism activities increase the systematic risk for most of the industries and the negative impact on returns of banks and the financial industry. It is noted that terrorism positively impacts (increases) the industrial systematic risk mainly in short-run (between two and four days-time horizon).

The paper examines the impact of terrorism on a broad list of industries’ (banks, basic materials, chemicals, construction, consumer goods, consumer services, financials, industrials, minerals, oil and gas, textile and utilities) risk and return in Pakistan, using the multiscale beta approach (Yamada, 2005) and the MODWT methods.