possible locations (Origin, Target country and Third country). The country is coded as target when it is that of the main nationality of the victims. Nearly 80% of the victims are associated with only one nationality over the whole period, which is why one could assign in a relatively confident way only one target country to an incident. It is important to note here that victims, in ITERATE, are defined as ”those who are directly affected by the terrorist incident by the loss of property, lives, or liberty”. Thus, when a French embassy is hit without casualties in say, an African country, France is then coded as the target country. Besides, the third country represents the country where the action begins _albeit_ different from the origin and target states. From figure 1, we can see that only a small and relatively stable proportion over time (10 to 20%) takes place in the targeted countries. Attacks like those of New York (2001), Madrid (2003) and more recently London (2005) are not representative of most of the incidents. In the earlier period, around 30 to 50% of the incidents took place in third countries but that share declined steadily over the period to reach around 20% of the incidents. This reduction seems to be concomitant with the rise of the share of incidents taking place in origin countries (i.e. where they have been planned and prepared). Hence, at the end of the period, 60 to 80% of the incidents became local. These findings are quite similar to those of Krueger and Laitin (2003) who use the Department of State dataset to assert that, in recent years, perpetrators preferred setting-up actions against ”targets from foreign countries [that are] close to home”. The reasons are beyond the scope of this paper. However, even if the third country location is decreasing, it is still highly variable and thus should still matter as much as incidents in origin and target countries for detecting the impact on counter-security measures and trade between them.

Table 2 ranks the main 50 targeted countries over the period. The US is by far the country that is most hit by terrorism attacks over the period, before France, Israel and Great Britain. Besides, the distribution of incidents across targeted countries does not change much over time. A simple calculation of the coefficient of correlation between the distribution at the beginning (1968-1978) and that at the end of the period (1997-2003) is around 0.96. It is quite simple to guess, however, that some countries like Israel are systematically targeted by a small number of groups related to one particular state (here Palestine)<sup>7</sup> . Can we say the same for the other most targeted countries?

Table 3 presents the top 65 ranking of ’bilateral’ incidents (i.e. ranking by origin and target countries) wherever those incidents take place. One can easily see that over one third of the bilateral incidents involve the US as a target country: that is, the distribution of incidents against the US is spread over a big sample of source countries. This is obviously not the case for Israel, France or Great Britain which are associated with at most 3 countries in the top 65. However, because of the bigger variability of incidents against the US, this makes cross-country studies related to the US as a target country easily implementable.

In relation to the link between transnational terrorism and bilateral trade flows, two important

> 7One should be aware here that only incidents perpetrated by Palestine against Israel, but in a third country, or implying victims from a third country, are reported in the ITERATE dataset. Most of the incidents between these two countries are not reported by ITERATE however, because they are considered to be domestic, not transnational, terrorism.

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