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Assessing terrorist risk and FDI using relative information measures

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  • Anthony Mancuso
  • Cassandra Dirienzo
  • Jayoti Das

Abstract

Recent research has explored the determinants of terrorism and the impact that terrorist activity has on a country. However, to date, no research has examined what specific aspect of terrorist risk most significantly impacts a country's ability to operate in the global market. Using the five sub-indices of the World Market Research Center's Global Terrorism Index, this study explores how the different dimensions of terrorist risk impact the inflow of Foreign Direct Investment (FDI) using a Shannon information measure of relationship. The results of this research suggest that a country's proven ability to prevent terrorist activity has the most significant impact on investment decisions in regard to FDI.

Suggested Citation

  • Anthony Mancuso & Cassandra Dirienzo & Jayoti Das, 2010. "Assessing terrorist risk and FDI using relative information measures," Applied Economics Letters, Taylor & Francis Journals, vol. 17(8), pages 787-790.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:8:p:787-790
    DOI: 10.1080/13504850802375479
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    Cited by:

    1. Sanjo, Yasuo, 2012. "Country risk, country size, and tax competition for foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 21(1), pages 292-301.
    2. Carly Petracco & Helena Schweiger, 2012. "The impact of armed conflict on firms’ performance and perceptions," Working Papers 152, European Bank for Reconstruction and Development, Office of the Chief Economist.
    3. Rodion Skovoroda & Shaun Goldfinch & Karl DeRouen & Trevor Buck, 2019. "The Attraction of FDI to Conflicted States: The Counter-Intuitive Case of US Oil and Gas," Management International Review, Springer, vol. 59(2), pages 229-251, April.

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