Terrorism and Uncertainty among Investors: the case of Peshawar School Massacre

Abstract

This paper focuses on the effect of terrorism on stock returns in Pakistan by taking into account major incidents, mainly the Peshawar School Massacre. Structured approach of Grounded Theory by (Corbin and Strauss 1990) and (Strauss and Corbin 1998) has been used as Grounded Theory is based on data and its constructs do not face the problem of accuracy that plagued the other Qualitative Data Analysis methods. Data have been collected primarily through interviews. The theory developed around the central category or the central phenomenon: feelings of insecurity among investors. The strategies developed for coping with the overarching phenomena are past experience, financial soundness of organizations, previous worth of the company, asset holding for a longer period and togetherness among nation. Overall, there was stability in stock prices, improved confidence of investors and outperforming of shares. This study is distinctive in examining the coping strategies from the perspective of investors who experienced the impact on stock prices of the occurrence of terrorist attacks.