Under Attack: Terrorism and International Trade in France, 2014-16

38 Pages Posted: 9 Jun 2021

See all articles by Volker Nitsch

Volker Nitsch

Technical University of Darmstadt

Isabelle Rabaud

University of Orleans

Date Written: 2021

Abstract

Terrorist events typically vary along many dimensions, making it difficult to identify their economic effects. This paper analyzes the impact of terrorism on international trade by examining a series of three large-scale terrorist incidents in France over the period from January 2015 to July 2016. Using firm-level data at monthly frequency, we document an immediate and lasting decline in cross-border trade after a mass terrorist attack. According to our estimates, France’s trade in goods, which accounts for about 70 percent of the country’s trade in goods and services, is reduced by more than 6 billion euros in the first six months after an attack. The reduction in trade mainly takes place along the intensive margin, with particularly strong effects for partner countries with low border barriers to France, for firms with less frequent trade activities and for homogeneous products. A possible explanation for these patterns is an increase in trade costs due to stricter security measures.

JEL Classification: F140, F520

Suggested Citation

Nitsch, Volker and Rabaud, Isabelle, Under Attack: Terrorism and International Trade in France, 2014-16 (2021). CESifo Working Paper No. 9108, Available at SSRN: https://ssrn.com/abstract=3862242 or http://dx.doi.org/10.2139/ssrn.3862242

Volker Nitsch (Contact Author)

Technical University of Darmstadt ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

Isabelle Rabaud

University of Orleans ( email )

Rue de Blois
B.P. 6739
45067 Orleans Cedex 2, Orleans cedex 2 45067
France

HOME PAGE: http://www.leo-univ-orleans.fr/fr/membres/#isabelle.rabaud@univ-orleans.fr

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