Replication data for: Detecting Illegal Arms Trade

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Project Citation:

DellaVigna, Stefano, and La Ferrara, Eliana. Replication data for: Detecting Illegal Arms Trade. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114748V1

Project Description

Summary: We propose a method to detect illegal arms trade based on investor knowledge. We focus on countries under arms embargo and identify events that suddenly increase or decrease conflict intensity. If a weapon-making company is trading illegally, an event that increases the demand for arms may increase stock prices. We find positive event returns for companies headquartered in countries with high corruption and low transparency in arms trade. We also suggest a method to detect potential embargo violations based on chains of reactions by individual stocks. The presumed violations positively correlate with the number of UN investigations and Internet stories. (JEL D74, F13, G14, K42, L64)

Scope of Project

JEL Classification:
      D74 Conflict; Conflict Resolution; Alliances; Revolutions
      F13 Trade Policy; International Trade Organizations
      G14 Information and Market Efficiency; Event Studies; Insider Trading
      K42 Illegal Behavior and the Enforcement of Law
      L64 Other Machinery; Business Equipment; Armaments

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Published Versions

V1 [2019-10-13]

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