Terrorism remains a persistent threat to global peace and stability, but its impact extends beyond the realm of security. We examine the impact of terrorism on the important capital market transaction of initial public offerings (IPOs). Consistent with the notion that terrorism dampens investor sentiment, we reveal robust evidence that first-day returns are lower in countries with higher Global Terrorism Index scores. Examining this issue at an international scale allows us to advance the literature in two important ways. First, we provide direct evidence that greater terror threat is associated with lower investor sentiment. Second, we determine that strong democratic principles, high-quality governance institutions, and transparent accounting disclosures moderate the negative impact of terror threat on investor sentiment and IPO returns.

恐怖主义仍然是对全球和平与稳定的持续威胁，但其影响超出了安全领域。我们研究了恐怖主义对首次公开募股（IPO）这一重要资本市场交易的影响。与恐怖主义抑制投资者情绪的观点相一致，我们揭示了强有力的证据表明，全球恐怖主义指数得分较高的国家的首日回报率较低。在国际范围内研究这个问题使我们能够以两种重要的方式推进文献的发展。首先，我们提供直接证据表明更大的恐怖威胁与较低的投资者情绪有关。其次，我们确定强有力的民主原则、高质量的治理机构和透明的会计披露可以减轻恐怖威胁对投资者情绪和 IPO 回报的负面影响。