Foreign direct investment, aid, and terrorism

By Subhayu Bandyopadhyay, Todd Sandler, Javed Younas. 2014

244 citations recorded by the source corpus.

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.

Subfields: Development, Information Systems, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/c2b596e93f4abdb0271fa8a39d68489aca3cd433

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Citations in the corpus

The Impact of Terrorism on Governance in African Countries (2017, methodology): “3 The purpose of using multiple types of terrorism variables is consistent with recent terrorism literature (Bandyopadhyay et al., 2014; Asongu & Nwachukwu, 2017).”
Geopolitical risks and the oil-stock nexus over 1899–2016 (2017, background): “As already pointed out above, reported findings show that major exogenous political events such as war, conflict, insurgencies and terrorism have the capacity to bring about noteworthy changes and shifts in equity markets; to influence the relationship between markets and assets, portfolio allocatio”
Geopolitical Risks and Movements in Islamic Bond and Equity Markets: A Note (2019, background): “…securities provide unique diversification gains due to the presence of Islamic law principles, any event that leads to a sudden spike in the geopolitical risks is likely to impact the venue-country markets (in the words of Bandyopadhyay, Sandler, and Younas 2013) as well as its global counterparts.”
Fighting terrorism in Africa: Benchmarking policy harmonization (2018, unknown): “…development and resource-wealth in conflict management (Humphreys, 2005; Meierrieks & Gries, 2013; Choi, 2015); the incidence of terrorism on innovation (Koh, 2007) and the relevance of foreign aid in the effect of terrorism on development outcomes (Bandyopadhyay et al., 2014; Efobi et al., 2015).”