above observations from our study.<sup>3</sup> . For instance, when the ETA group from Spain perpetrates an incident in Spain, it shall not be considered as ’transnational’ and thus shall be withdrawn from the data at hand. However, when the same ETA group attacks a Spanish authority, one of its representations or Spanish civilians within another country, say France, then the observation is kept in the dataset. That is because that type of act has some implications for security measures on the Franco-Spanish borders.

At the end, from nearly 12,500 observations in the ITERATE dataset from 1968 to 2003, we end up with around 10,700. We first look at the origin of the incidents and their place of location. Before going into details, one has to be aware that the country of origin might or might not be the country of location of the incidents: we identify each origin by the country of first nationality of the terrorist group while the country of location is the country where the act has been observed in the ITERATE dataset. In order to save space, table 1 ranks the first 60 countries of origin by their number of incidents over the period, although one should be aware that most if not all of the countries in the world have been at the origin of at least one terrorist incident from 1968. The table indicates that these countries have been related to at least 20 incidents each during the period. Besides, it is worth mentioning that one third of total incidents have been perpetrated by unknown groups, to which no origin have been associated.<sup>4</sup> The country of origin as it is defined here might not be that of the operations of the group. In general, when the group does not operate in his own country it might be operating in the country of location of the incidents (hereafter, host country)<sup>5</sup> . Therefore, it is interesting to see what is the proportion of incidents originating from one country but that takes place in another. ITERATE is a place-based dataset. We know exactly where and when each incident has started and ended. In more than 95%, the location of start is the same than that of its end which makes it relatively straightforward to locate the incidents.<sup>6</sup> Figure 1 sketches the distribution of the incidents extracted from the ITERATE database across 3

> 3It is worthwhile mentioning that we have kept incidents emanating from Palestine as the latter is already recognized as a state by 94 nations around the world. Further, 11 more nations, generally from the OECD, grant Palestine some specific form of diplomatic status.

> 4As it has been already documented in Sandler and Enders (2004), the number of incidents has decreased dramatically after the nineties compared to the first decade. Although experienced by most of the origin countries, this drop had not been uniform. For instance, although groups from Palestine and Colombia had been very active during the whole period, Lebanese and Iranien group activities had been extremely high only during the eightees and the nineties. In recent years, it has even risen dramatically in some countries like Pakistan, Afghanistan and Saudi Arabia.

> 5The case of Al-Qaeda is an exception where the country of nationality of the group (presumably Saudi-Arabia) is different from its presumed country of residence (’Headquarters’ in Afghanistan or Pakistan) and further different from many countries where its ’affiliates’ operate. See Clarke, 2004. That said however, following our definition of country of origin, we have classified Al-Qaeda operations as originating from Saudi-Arabia as in Krueger and Laitin (2003). Now, because of its affiliates, Al-Qaeda could have many countries of origin and this could be problematic to our study that relates the economic impact of terrorism to the pre-identified country of origin of the groups. Now, one can still assume that the authorities threatened by Al-Qaeda consider the islamic world as one country of origin as a whole, against which they must secure the borders. In that case, our study can still predict of how much Al-Qaeda incidents are affecting trade between the targeted country and the muslim countries taken as a whole.

> 6Where the start location is different from its end however (i.e. Aerial Hijacking), we code the host country as the country where the incident has started.

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