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Natural Resource Exports, Foreign Aid and Terrorism

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  • Asongu, Simplice

Abstract

This study investigates linkages between foreign aid, terrorism and natural resource (fuel and iron ore) exports in 78 developing countries from 1984 to 2008. The empirical evidence is based on interactive GMM estimations with forward orthogonal deviations. Bilateral, multilateral and total aid dynamics are employed whereas terrorism entails: domestic, transnational, unclear and total terrorism dynamics. The following findings are established. First, the information criteria for the validity of specifications corresponding to iron ore exports do not hold. Second, there is evidence of convergence in fuel exports. Third, while the effects of aid dynamics are not significant, the impacts of terrorism dynamics are consistently positive on fuel exports. Fourth, the interaction between terrorism and aid dynamics consistently display negative signs, with corresponding modifying aid thresholds within respective ranges. Unexpected signs are elicited and policy implications discussed. The inquiry improves extant knowledge on nexuses between resources, terrorism and foreign aid.

Suggested Citation

  • Asongu, Simplice, 2019. "Natural Resource Exports, Foreign Aid and Terrorism," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 9(1), pages 74-94.
  • Handle: RePEc:gok:ijdcv1:v:8:y:2019:i:1:p:74-94
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    Keywords

    Exports; Foreign Aid; Terrorism; Natural Resources; Development;

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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