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The purpose of this paper is to examine the impact of terrorism in the Organization of the Petroleum Exporting Countries (OPEC) on the return and volatility of world price of oil.

GARCH models and daily data from 1987 till 2015 will be used.

The empirical results reveal that terrorism in the OPEC affects positively oil returns and negatively its volatility. Results also show that the different characteristics of the attacks are likely to have different impact on the return and volatility of oil prices. In overall terms, terrorism has a much larger positive impact on the return of oil prices and negative impact on its volatility if it targets the oil industry in the OPEC. This marginal effect is even greater if those attacks were successful.

The distinguishing feature of this paper is that the authors use a framework that takes into account different attributes for terrorism the success of the attacks, the intensity of the attacks and the associated targets.

The purpose of this paper is to study the direction of the causality between tourism development and economic growth in Lebanon between 1995 and 2013, after taking into consideration terrorist incidents and their intensities. These are considered as exogenous shocks that affect tourism development and economic growth instantaneously and with a lag.

To reach the objectives, the authors estimate a vector auto regressive model with exogenous variables, applying a series of unit root tests with and without structural breaks and the Granger causality test.

The findings suggest a positive unidirectional causality running from tourism development to economic growth in the short run. Thus, the authors find evidence for the tourism-led growth hypothesis (TLGH) in Lebanon despite the exposure of the country to frequent terrorist incidents. The impulse response functions reveal that tourism development (economic growth) responds positively to a positive shock to economic growth (tourism development).

The findings call for Lebanese policy makers aiming at promoting growth to design policies that encourage tourism, such as implementing tourism marketing policies and building the needed tourism infrastructure. Such policies will have positive but transitory effects on economic growth. The findings may also be useful for regional representatives of intergovernmental organizations and the offices of statistics of United Nations World Tourism Organization and the World Bank to better understand the tourism industry in Lebanon and similar countries suffering from instabilities.

This paper contributes to the existing literature in three points: despite the importance of the tourism industry to the Lebanese economy, this topic did not receive careful attention in the literature; it takes into consideration the presence of structural breaks and possible nonlinearities in the number of tourist arrivals; and it investigates the TLGH after accounting for instability in the country.