Investigating the Economic Consequence of Terrorism in Sub-Saharan Africa: Evidence from a Dynamic Panel Model

Agu Christian (), Mbah Augustine Jideofor () and Agu Chukwuagoziem Samuel ()
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Agu Christian: Department of Economics, University of Nigeria, Nsukka, Nigeria
Mbah Augustine Jideofor: Department of Economics, University of Nigeria, Nsukka, Nigeria
Agu Chukwuagoziem Samuel: Department of Economics, University of Nigeria, Nsukka, Nigeria

Statistics, Politics and Policy, 2023, vol. 14, issue 2, 125-149

Abstract: This study examines the economic consequence of terrorism in Sub-Saharan Africa (SSA) with a panel of 38 countries between 2010 and 2020. Specifically, the study examined the impact of terrorism on economic growth, international tourism demand, income inequality, unemployment rate, and inflation rate. The study employed the two-step system GMM and quantile regression for the estimation. The results show that terrorism has had a significant negative impact on economic growth in SSA. Similarly, the study results indicate that terrorism impacts negatively on international tourism demand, widens the income gap, and increases the rate of unemployment and inflation in SSA. Furthermore, the two governance institution indicators employed in the study (government effectiveness and control of corruption) shows a significant negative impact on economic growth in the zone, while credit to the private sector and human capital had performed abysmally in the zones’ growth trajectory. These findings were further supported by the quantile regression results. The study employed both system GMM model and quantile regression in the analysis. The use of these two different methods makes the results obtained to be robust and efficient for policy purpose, which no other author has done before now.

Keywords: economic growth; institutions; quantile regression; Sub-Saharan Africa; system GMM; terrorism (search for similar items in EconPapers)
JEL-codes: E02 F51 N47 O43 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/spp-2022-0014

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