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Terrorist Activities and Capital Flows of Developed Countries

Author

Listed:
  • Tomislav Galović

    (Faculty of Economics, University of Rijeka, Croatia)

  • Heri Bezić

    (Faculty of Economics, University of Rijeka, Croatia)

  • Petar Mišević

    (Croatian Chamber of Commerce, Zagreb, Croatia)

Abstract

The main aim of this paper is to measure the consequences of terrorist activities on capital flows of the developed countries. Capital flows are interpreted as FDI inflows and outflows. The methodology is based on the dynamic panel data models (System-2 step-GMM estimator) using a sample of 36 developed countries all over the world from 2000 to 2016. The key results indicate that the terrorist incidents have different impact on capital flows of the developed countries compared to impacts of economic and institutional variables. All the variables used in the paper show the level of their impact on capital flows. The results indicate that terrorist activities weaken economic activity of a country, while minimising capital flows in certain situations. The recommendations and proposals are given based on the results of research.

Suggested Citation

  • Tomislav Galović & Heri Bezić & Petar Mišević, 2018. "Terrorist Activities and Capital Flows of Developed Countries," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 68(3), pages 337-352, September.
    • Handle: RePEc:aka:aoecon:v:68:y:2018:i:3:p:337-352
    Note: Research has been fully supported by the University of Rijeka under the project number 18.02.2.2.01 and 13.02.1.3.13.
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    Citations

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    Cited by:

    1. Ibrahim A. Adekunle & Sheriffdeen A. Tella & Kolawole Subair & Soliu B. Adegboyega, 2020. "Remittances and Financial Development in Africa," Working Papers of the African Governance and Development Institute. 20/081, African Governance and Development Institute..
    2. Ibrahim A. Adekunle & Sheriffdeen A. Tella & Kolawole Subair & Soliu B. Adegboyega, 2020. "Remittances and Financial Development in Africa," Research Africa Network Working Papers 20/081, Research Africa Network (RAN).
    3. Ibrahim A. Adekunle & Sheriffdeen A. Tella & Kolawole Subair & Soliu B. Adegboyega, 2020. "Remittances and Financial Development in Africa," Working Papers 20/081, European Xtramile Centre of African Studies (EXCAS).
    4. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2019. "Does Terrorism Affect Foreign Direct Investment?," Working Papers 1913, Department of Applied Economics II, Universidad de Valencia.
    5. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2022. "Does terrorism affect greenfield investment? A structural gravity approach," ThE Papers 22/06, Department of Economic Theory and Economic History of the University of Granada..

    More about this item

    Keywords

    developed countries; capital flows; international competitiveness; terrorist activities;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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