The impact of terrorism on Greek Banks’ Stocks: an event study

Panagiotis Liargovas and Spyridon Repousis

No 50, Working Papers from University of Peloponnese, Department of Economics

Abstract: This paper investigates the reaction of Greek banks’ stocks to three major international terrorist events (September 11 2001 attacks in New York, Madrid train bombing in March 11, 2004 and London train bombing in July 7, 2005). Using event study methodology and market model, this study finds out that of the three terrorist attacks, only September 11th resulted in significant abnormal returns in the Greek bank stocks. Positive and negative excess returns indicate that the Athens Stock Exchange may have overreacted to the terrorist attacks and pre-event negative excess returns may have driven by expectation of an impending anomaly. Several reasons may be responsible for these results but September 11th was more catastrophic due to the dominant position of USA economy worldwide. index.

Keywords: Terrorism; stock returns; banks; Event Study; Efficient markets (search for similar items in EconPapers)
Pages: 14 pages
Date: 2010
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