In this Policy Briefing, we review the available terrorism databases by focusing on their characteristics, advantages and disadvantages. This serves as a guide for policymakers and academic researchers alike. The rapid and accelerating development of security economics has generated great demand...

In this Policy Briefing, we discuss two important questions: (i) whether and how terrorism shocks are transmitted across international stock markets, (ii) what is the role of behavioral factors in explaining these stock market reactions. According to our findings terrorism shocks are indeed...

Informationally driven capital market imperfections may lead to a systematic relation between expenditure on used capital and the severity of liquidity constraints. We project used capital outlays on internal finance across sectors of different sizes documenting that the sensitivity of used...

An 'excess sensitivity' of investment to internal funds (cash flow) is typically interpreted as evidence for the presence of financing constraints. Building on this, we empirically investigate the possibility of an asymmetric response of investment to the availability of internal funds across...

In this study we develop a simple econometric model for labour demand dynamics by explicitly considering deviations from the standard frictionless economic environment. In particular, we explore the potential effect on labour demand of capital market imperfections, labour market institutional...

Using survey data for firms from Eastern European transition economies we investigate the determinants of credit rationing. Our rationing definition incorporates firms whose loan application was rejected, but also ‘discouraged’ potential borrowers. We employ a bivariate probit with...

The determinants of the cross-market transmission mechanism for terrorist shocks are explored, focusing on two major terrorist events and 68 national stock markets. We generate daily abnormal returns from a three-factor world asset pricing model. Abnormal returns are then regressed on proxies of...

The extant literature has established that the occurrence of major terrorist events leads to negative abnormal returns not only to the location of the event, but also to third countries. However, the literature has neither investigated which are the diffusion mechanisms of terrorist shocks, nor...

Motivated by the investor sentiment literature and assuming that terrorist activity influences investor mood the paper explores whether terrorism exerts a significant negative impact on daily stock market returns for a sample of 22 countries. The employed empirical specifications are based on...