Template-type: ReDif-Paper 1.0
Author-Name: Bos J.W.B. 
Author-Name: Frömmel M. 
Author-Name: Lamers M.A.J. 
Author-workplace-name: GSBE
Title: FDI, terrorism and the availability heuristic for U.S. investors before and after 9/11
Abstract: We record the existence of an availability heuristic that is reflected in disaster myopia of U.S.  investors and exists prior to the attacks of 9/11. We argue that this is fueled by an aggregate experience hypothesis effect, resulting in a pronounced increase in the sensitivity of U.S. stock prices to terrorist attacks on foreign soil. After 9/11, stock prices react proportionally to the size of an attack and the share of FDI stock held in the region by the sector in which firms operate. This effect, non-existent prior to 2002, has become increasingly strong in recent years.
Keywords: Empirical Studies of Trade; Information and Market Efficiency; Event Studies; International Financial Markets; 
Classification-JEL: F14; G14; G15; .
Series:  Research Memorandum
Creation-Date: 2013
Number: 047
File-URL: http://pub.maastrichtuniversity.nl/7e26b169-b8cd-4496-bbb9-61c09c74a79a
File-Format: application/pdf
File-Size: 814855
Handle: RePEc:unm:umagsb:2013047