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Under Attack: Terrorism and International Trade in France, 2014-16

Terrorist events typically vary along many dimensions, making it difficult to identify their economic effects. This paper analyzes the impact of terrorism on international trade by examining a series of three large-scale terrorist incidents in France over the period from January 2015 to July 2016. Using firm-level data at monthly frequency, we document an immediate and lasting decline in cross-border trade after a mass terrorist attack. The reduction in trade mainly takes place along the intensive margin, with particularly strong effects for countries with low border barriers, for firms with less frequent trade activities and for homogeneous products.