Terrorism is considered a great threat in many countries around the world. This phenomenon affects a country's political, economic, and financial situation. This research aims to explore a new line of thinking that bears the impact of terrorism on the cost of debt. In addition, being a rough indicator of the cost of debt, we analyzed the effect of terrorism on the sovereign debt rating. This is also justified by analyzing dynamic panel data from a sample of 24 countries from 1994 to 2019. The results of our study confirm the hypothesis that terrorism would result in a higher cost of debt for the states of these countries. An increase in terrorist attacks leads to an average reduction in sovereign credit rating. This corresponds to a deterioration in the credit rating of sovereign debt, for example, from BB + to BB-.
Sghaier, A. , & Farjallah, N. (2022). The Effect of Terrorism on the Cost of Debt: Empirical Validation for a Panel of Countries. Iranian Economic Review, (), -. doi: 10.22059/ier.2022.89061
MLA
Asma Sghaier; Nadia Farjallah. "The Effect of Terrorism on the Cost of Debt: Empirical Validation for a Panel of Countries", Iranian Economic Review, , , 2022, -. doi: 10.22059/ier.2022.89061
HARVARD
Sghaier, A., Farjallah, N. (2022). 'The Effect of Terrorism on the Cost of Debt: Empirical Validation for a Panel of Countries', Iranian Economic Review, (), pp. -. doi: 10.22059/ier.2022.89061
CHICAGO
A. Sghaier and N. Farjallah, "The Effect of Terrorism on the Cost of Debt: Empirical Validation for a Panel of Countries," Iranian Economic Review, (2022): -, doi: 10.22059/ier.2022.89061
VANCOUVER
Sghaier, A., Farjallah, N. The Effect of Terrorism on the Cost of Debt: Empirical Validation for a Panel of Countries. Iranian Economic Review, 2022; (): -. doi: 10.22059/ier.2022.89061
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