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

Nitsch, Volker ; Rabaud, Isabelle (2021):
Under Attack: Terrorism and International Trade in France, 2014-16. (Publisher's Version)
In: Darmstadt Discussion Papers in Economics, 241, Darmstadt, ISSN 1438-2733,
DOI: 10.26083/tuprints-00018609,
[Report]

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.

Item Type: Report
Erschienen: 2021
Creators: Nitsch, Volker ; Rabaud, Isabelle
Status: Publisher's Version
Title: Under Attack: Terrorism and International Trade in France, 2014-16
Language: English
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.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 241
Place of Publication: Darmstadt
Collation: 35 Seiten
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > International Economics
Date Deposited: 26 May 2021 08:05
DOI: 10.26083/tuprints-00018609
Official URL: https://tuprints.ulb.tu-darmstadt.de/18609
URN: urn:nbn:de:tuda-tuprints-186090
Additional Information:

JEL Classification Codes: F14; F52 Keywords: shock; insecurity; uncertainty; terrorism; international trade; France

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