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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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    Cited by:

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    2. Abeliansky, Ana L. & Hilbert, Martin, 2017. "Digital technology and international trade: Is it the quantity of subscriptions or the quality of data speed that matters?," Telecommunications Policy, Elsevier, vol. 41(1), pages 35-48.
    3. De Sousa, José & Mirza, Daniel & Verdier, Thierry, 2018. "Terror networks and trade: Does the neighbor hurt?," European Economic Review, Elsevier, vol. 107(C), pages 27-56.
    4. Alice Y. Ouyang & Ramkishen S. Rajan, 2017. "Impact of Terrorism on Cross-Border Mergers and Acquisitions (M&As): Prevalence, Frequency and Intensity," Open Economies Review, Springer, vol. 28(1), pages 79-106, February.
    5. Volker Nitsch & Isabelle Rabaud, 2019. "Under Attack: Terrorism and International Trade in France, 2014-16," Working Papers hal-02411649, HAL.
    6. Subhayu Bandyopadhyay & Hristos Doucouliagos & Cong S. Pham, 2021. "Effects of neighboring nation terrorism on imports," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 144-167, July.
    7. Federico Carril-Caccia & Jordi Paniagua & Francisco Requena, 2021. "Asylum Migration, Borders, and Terrorism in a Structural Gravity Model," Politics and Governance, Cogitatio Press, vol. 9(4), pages 146-158.
    8. Kshetri, Nir, 2017. "The evolution of the internet of things industry and market in China: An interplay of institutions, demands and supply," Telecommunications Policy, Elsevier, vol. 41(1), pages 49-67.
    9. Dorine Boumans & Johanna Garnitz & Günther G. Schulze, 2018. "Who has terror angst? Perceptions of the effects of terror on the world economy," Applied Economics Letters, Taylor & Francis Journals, vol. 25(1), pages 29-33, January.
    10. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2020. "Terms-of-trade and counterterrorism externalities," Oxford Economic Papers, Oxford University Press, vol. 72(2), pages 293-318.
    11. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2016. "Trade and Terrorism: A Disaggregated Approach," Working Papers 2016-1, Federal Reserve Bank of St. Louis.
    12. Subhayu Bandyopadhyay & Devashish Mitra & Cong S. Pham, 2017. "The Effects of Terror on International Air Passenger Transport: An Empirical Investigation," Working Papers 2017-2, Federal Reserve Bank of St. Louis.
    13. Pham, Cong S. & Doucouliagos, Chris, 2017. "An Injury to One Is an Injury to All: Terrorism's Spillover Effects on Bilateral Trade," IZA Discussion Papers 10859, Institute of Labor Economics (IZA).
    14. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2016. "Terrorism, Trade and Welfare: Some Paradoxes and a Policy Conundrum," Working Papers 2016-2, Federal Reserve Bank of St. Louis.
    15. Pritee Sharma & Salla Nithyanth Kumar, 0. "The global governance of water, energy, and food nexus: allocation and access for competing demands," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-15.
    16. 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..
    17. Pritee Sharma & Salla Nithyanth Kumar, 2020. "The global governance of water, energy, and food nexus: allocation and access for competing demands," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(2), pages 377-391, June.
    18. Stacy Julius & Nnanna P. Azu & Maimuna Y. Muhammad, 2019. "Assessing the Impact of Terrorism in Trade Development in the SADC Region: A Gravity Model Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(10), pages 1147-1159, October.
    19. Subhayu Bandyopadhyay & Todd Sandler, 2014. "The effects of terrorism on trade: a factor supply approach," Review, Federal Reserve Bank of St. Louis, vol. 96(3), pages 229-241.
    20. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2017. "Terrorism, Trade, and Welfare," Review, Federal Reserve Bank of St. Louis, vol. 99(3), pages 295-306.

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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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