How Terrorism Affects Foreign Direct Investment in Pakistan

Hashmat Ali, Qingshi Wang, Irfan Ullah and Zulfiqar Ali
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Hashmat Ali: School of Economics, Dongbei University of Finance and Economics, Dalian P. R. China,
Irfan Ullah: School of Accounting, Dongbei University of Finance and Economics, Dalian P. R. China,
Zulfiqar Ali: School of Accounting, Dongbei University of Finance and Economics, Dalian R.P China.

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 3, 625-631

Abstract: This study is an attempt to investigate the long run interplay between the terrorism and foreign direct investment (FDI) in Pakistan. Terrorism is measured by the number of events, fatalities and injuries with other variables. In this paper, annual time series data is taken from the Global Terrorism Database and World Development indicators, from the period 1980-2015. In the study, we have employed Johansen co-integration approach to examine the long run relationship between the mentioned variables. The study concludes that FDI has a negative significant relationship with fatalities and injuries whereas events have no long-run relationship with FDI. This reflects that fatalities and injuries which occur due to terrorist activities significantly affect the flow of foreign inflows into Pakistan.

Keywords: Terrorism; Foreign Direct Investment; Emerging Economy (search for similar items in EconPapers)
JEL-codes: C22 E22 F21 G18 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (15)

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