This study attempts to investigate the effect of violence surge on business activities in Khyber Pakhtunkhwa (KP). This impact has been investigated in district Peshawar which witnessed episodes of violent shocks since the last decade with a comparison group district Swabi. The data regarding the investment behavior, perceived security/insecurity level, victimization and other control set of covariates (firm specific characteristics and personal characteristics) are collected through the questionnaire in both the districts. We applied the linear probability model because my dependent variable is 0 and 1, and found that violent shocks have adversely affected the investment behavior of investors in district Peshawar compared to the reference region, district Swabi. Additionally, to assess the possible sources of channel of the affect, the study examined the effect of violence surge on perceived insecurity and the level of victimization among the investors. We perceived that violent shocks increased the level of perceived insecurity and personal victimization, which hindrance the additional investment activities in the region. Supervisor:- Dr. Muhammad Nasir