The Effect of Terrorist Incidents on Capital Flows

Randall Filer and Dragana Stanisic

No 3998, CESifo Working Paper Series from CESifo

Abstract: Current literature shows a significant negative impact of terrorism on countries economies. We explore this relationship in more detail. Using an unbalanced panel of over 160 countries for up to 25 years and the Global Terrorism Database (GTD) we show a decrease in FDI as a consequence of terrorism. We also find evidence that FDI flows are more sensitive to terrorism than either portfolio investments or external debt flows. Finally, we test the hypothesis that terrorism has negative spill-over effects on FDI flows into neighboring countries and find evidence that cultural but not geographical closeness matters.

Keywords: FDI; terrorism; lending; portfolio investment (search for similar items in EconPapers)
JEL-codes: F20 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Effect of Terrorist Incidents on Capital Flows (2016)
Working Paper: The Effect of Terrorist Incidents on Capital Flows (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3998

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