EconPapers    
Economics at your fingertips  
 

Foreign direct investment, aid, and terrorism

Subhayu Bandyopadhyay (), Todd Sandler () and Javed Younas

Oxford Economic Papers, 2014, vol. 66, issue 1, 25-50

Abstract: This paper constructs a theoretical model to investigate the relationship between the two major forms of terrorism and foreign direct investment (FDI). We analyze with various estimators how these relationships are affected by foreign aid flows by focusing on 78 developing countries for 1984--2008. Both types of terrorism are found to depress FDI. Aggregate aid mitigates the negative consequences of domestic and transnational terrorism, but this aid appears more robust in ameliorating the adverse effect of domestic terrorism. However, when aid is subdivided, bilateral aid is effective in reducing the adverse effects of transnational terrorism on FDI, whereas multilateral aid is effective in curbing the adverse effects of domestic terrorism on FDI. For transnational terrorism, there is evidence in the literature that donor countries earmark some bilateral aid to counterterrorism. Aid's ability to curb the risk to FDI from terrorism is important because FDI is an important engine of development. Copyright 2014 Oxford University Press 2013, Oxford University Press.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (75) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/oep/gpt026 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:66:y:2014:i:1:p:25-50

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by A. Banerjee and James Forder

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press (). This e-mail address is bad, please contact .

 
Page updated 2019-10-19
Handle: RePEc:oup:oxecpp:v:66:y:2014:i:1:p:25-50