Podcast
In a Dubai Initiative Brown Bag Seminar on February 18, 2009, DI Fellow Mohamad Al-Ississ discussed the cross-border impact of violent events. Al-Ississ argued that political violence has two negative effects on the country it afflicts: a small one from the actual loss of human and physical capital and larger impact from the reallocation of economic and financial activities out of that country. Additionally, Al-Ississ argued that, as a result of the substitution of activities away from the afflicted country, violence has a positive cross-border impact on other, unaffected countries. Al-Ississ’ findings are the result of event studies conducted on the financial impact of 66 violent events on 57 stock exchanges between 1988 and 2007. Al-Ississ also analzyed how geographic distance and contiguity, risk perception, openness of global capital markets, and type of events determine the extent of the cross-border impact.
