Terrorist attacks and energy firms' crash risk in stock markets: Evidence from China

Dongmin Kong, Mengxu Xiong and Junyi Xiang

Energy Economics, 2021, vol. 102, issue C

Abstract: This paper investigates the effects of terrorism on energy firms' stock price crash risk in Chinese listed firms. When terrorist attacks occurred in a certain range near the firm, the crash risk increased significantly by approximately 17.5% on average. A plausible mechanism is that energy firms are likely to conduct aggressive investment in terms of the negative effect of the attacks. Local governments may press local firms to invest more to support the local economy, and local financing costs may fall, giving local firms a good opportunity to invest when the economy performs poorly.

Keywords: Terrorist attacks; Crash risk; China; Energy firms; Investment (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:102:y:2021:i:c:s0140988321003601

DOI: 10.1016/j.eneco.2021.105474

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