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Emerging Risks: An Overview Read chapter Read first chapter

2020 | OriginalPaper | Chapter

7. Terrorism and Trading: Differential Equity and Bond Market Responses During Violent Elections

Authors : Allan Dwyer, Tashfeen Hussain

Published in: Ecological, Societal, and Technological Risks and the Financial Sector

Publisher: Springer International Publishing

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Abstract

Equity market investors gauge future corporate profits and sell shares when negative news announcements threaten future earnings. Comparatively, sovereign bonds sell off when economic conditions darken, and bond yields rise accordingly. Together, stock and bond markets amount to an intricate crowd-sourcing mechanism for acting upon perceived changes in, among other things, political risk. Frontier financial markets present particularly esoteric market information systems, and elections in frontier markets present a particularly fraught opportunity for study. Using a robust data set on electoral violence, this chapter assesses financial market responses to reports of electoral violence during the 2013 general elections in Pakistan. It will contribute to wider interdisciplinary discussions of political risk by offering constructs from finance which may clarify perceptions of, and responses to, civil strife in frontier economies during discrete time periods.

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Metadata
Title
Terrorism and Trading: Differential Equity and Bond Market Responses During Violent Elections
Authors
Allan Dwyer
Tashfeen Hussain
Copyright Year
2020
Publisher
Springer International Publishing
Book
Ecological, Societal, and Technological Risks and the Financial Sector

Print ISBN: 978-3-030-38857-7

Electronic ISBN: 978-3-030-38858-4

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-38858-4_7