Failed terror attack and stock market returns: the case of Pakistan stock exchange

ABSTRACT

This study investigates the effect of a failed terror attack on stock market returns using an event study approach. The mean-adjusted returns and the market model are used to analyse the event. The results show that the failed attack on the Pakistan Stock Exchange building in Karachi generated positive cumulative returns for all the listed stocks, suggesting that such events have positive effects on stock market returns.

KEYWORDS:

• Terror attack
• stock market returns
• event study
• Pakistan

JEL CLASSIFICATION:

• G14
• G12

Disclosure statement

No potential conflict of interest was reported by the authors.