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International terrorism as a trade impediment?

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  • Peter Egger
  • Martin Gassebner

Abstract

This article uses monthly data on bilateral trade in conjunction with monthly data on terrorism events and associated fatalities to shed light on the impact of terrorism on trade. Employing a structural model of trade, we provide evidence that, if at all, international terrorism displays effects on bilateral and multilateral trade only in the medium run (more than one and a half years after an attack/incident). The pure short-run impact of international terror on trade appears very small, if not negligible.

Suggested Citation

  • Peter Egger & Martin Gassebner, 2015. "International terrorism as a trade impediment?," Oxford Economic Papers, Oxford University Press, vol. 67(1), pages 42-62.
    • Handle: RePEc:oup:oxecpp:v:67:y:2015:i:1:p:42-62.
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    File URL: http://hdl.handle.net/10.1093/oep/gpu037
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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