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How Terrorism Affects Foreign Direct Investment in Pakistan

Author

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  • Hashmat Ali

    (School of Economics, Dongbei University of Finance and Economics, Dalian P. R. China,)

  • Wang Qingshi

    (School of Economics, Dongbei University of Finance and Economics, Dalian R.P China,)

  • Irfan Ullah

    (School of Accounting, Dongbei University of Finance and Economics, Dalian P. R. China,)

  • Zulfiqar Ali

    (School of Accounting, Dongbei University of Finance and Economics, Dalian R.P China.)

Abstract

This study is an attempt to investigate the long run interplay between the terrorism and foreign direct investment (FDI) in Pakistan. Terrorism is measured by the number of events, fatalities and injuries with other variables. In this paper, annual time series data is taken from the Global Terrorism Database and World Development indicators, from the period 1980-2015. In the study, we have employed Johansen co-integration approach to examine the long run relationship between the mentioned variables. The study concludes that FDI has a negative significant relationship with fatalities and injuries whereas events have no long-run relationship with FDI. This reflects that fatalities and injuries which occur due to terrorist activities significantly affect the flow of foreign inflows into Pakistan.

Suggested Citation

  • Hashmat Ali & Wang Qingshi & Irfan Ullah & Zulfiqar Ali, 2017. "How Terrorism Affects Foreign Direct Investment in Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 625-631.
    • Handle: RePEc:eco:journ1:2017-03-83
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    References listed on IDEAS

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    Cited by:

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    2. Iheonu Chimere O. & Ichoku Hyacinth E., 2022. "Terrorism and investment in Africa: Exploring the role of military expenditure," Economics and Business Review, Sciendo, vol. 8(2), pages 92-112, July.
    3. Francois Cornelius Wehncke & Patricia Lindelwa Makoni & Godfrey Marozva, 2022. "Nexus Between FDI, ODA and Economic Growth in Developing African Countries: A Systems Approach," Economic Research Guardian, Weissberg Publishing, vol. 12(2), pages 97-114, December.
    4. Murshed, Muntasir & Dao, Nhung Thi Tuyet, 2020. "Revisiting the EKC hypothesis in South Asia: The role of Export Quality Improvement," MPRA Paper 111620, University Library of Munich, Germany, revised 2020.
    5. Eleftheria Koniari, 2017. "Greek Foreign Direct Investments In South-Eastern Europe," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 13(1), pages 67-83.
    6. Oumarou Zallé & Idrissa M. Ouédraogo, 2021. "Spillover effects of corruption and democracy on territorial attractiveness of foreign direct investment in sub‐Saharan Africa," African Development Review, African Development Bank, vol. 33(4), pages 756-769, December.
    7. Yilmaz BAYAR & Omer Faruk OZTURK, 2018. "Impact of foreign direct investment inflows on tax revenues in OECD countries: A panel cointegration and causality analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(614), S), pages 31-40, Spring.
    8. Kouassi YEBOUA, 2019. "Human capital and the FDI-Income inequality nexus in African countries: Panel smooth transition regression approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(618), S), pages 73-88, Spring.
    9. Anayochukwu Basil Chukwu & Adeolu O. Adewuyi & Adebowale M. Adeleke & Banji B. Awodumi & Tobechi F. Agbanike, 2022. "Modelling composition of growth, FDI and welfare in Africa: a SEM approach," Economic Change and Restructuring, Springer, vol. 55(4), pages 2445-2478, November.
    10. Okafor, Luke Emeka & Hassan, M. Kabir & Rashid, Mamunur & Prabu, Darniya & Sabit, Ahmed, 2022. "Risk dimensions, risk clusters, and foreign direct investments in developing countries," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 636-649.
    11. Yaya Keho, 2020. "Linkages between Foreign Direct Investment and Financial Development: Evidence from West African Countries," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(6), pages 1-3.
    12. Destek, Mehmet Akif & Manga, Müge & Cengiz, Orhan & Destek, Gamze, 2022. "Investigating the potential of renewable energy in establishing global peace: Fresh evidence from top energy consumer countries," Renewable Energy, Elsevier, vol. 197(C), pages 170-177.
    13. Idrys Fransmel Okombi, 2021. "Taxation et croissance économique en Afrique: la qualité des institutions importe‐t‐elle?," African Development Review, African Development Bank, vol. 33(4), pages 592-606, December.

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    More about this item

    Keywords

    Terrorism; Foreign Direct Investment; Emerging Economy;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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