The Impact of Terrorism on the Defence Industry

26 Pages Posted: 7 Jun 2010

See all articles by Claude Berrebi

Claude Berrebi

RAND Corporation; Hebrew University - The Federmann School of Public Policy and Government; University of California, Los Angeles (UCLA) - Department of Economics; Princeton University - Department of Economics; RAND Corporation - Labor and Population Studies

Esteban F. Klor

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: 2008-07-28

Abstract

This paper analyses the impact of terrorism on Israeli companies related to the defence, security or anti-terrorism industries, relative to its impact on other companies. We match every Israeli company to the American company with the closest expected return among all the companies that belong to the same industry and trade in the same market, in order to isolate the effect of terrorism from other common industry shocks. The findings show that whereas terrorism had a significant negative impact of 5% on non-defence-related companies, it had a significantly positive overall effect of 7% on defence-related companies.

Suggested Citation

Berrebi, Claude and Klor, Esteban F., The Impact of Terrorism on the Defence Industry (2008-07-28). Economica, Vol. 77, Issue 307, pp. 518-543, July 2010. Available at SSRN: https://ssrn.com/abstract=1620619 or http://dx.doi.org/10.1111/j.1468-0335.2008.00766.x

Claude Berrebi (Contact Author)

RAND Corporation ( email )

Santa Monica, CA
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HOME PAGE: http://www.rand.org/about/people/b/berrebi_claude.html

Hebrew University - The Federmann School of Public Policy and Government

Hebrew University
Mount Scopus
Jerusalem, 91905
Israel

University of California, Los Angeles (UCLA) - Department of Economics ( email )

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HOME PAGE: http://www.econ.ucla.edu/people/Faculty/Berrebi.html

Princeton University - Department of Economics ( email )

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HOME PAGE: http://www.princeton.edu/~cberrebi

RAND Corporation - Labor and Population Studies ( email )

1776 Main Street
Santa Monica, CA
United States
310-393-0411 (Phone)

Esteban F. Klor

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3143 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: http://economics.huji.ac.il/facultye/klor/klor.htm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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