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Are Lives a Substitute for Livelihoods? Terrorism, Security, and US Bilateral Imports

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  • Daniel Mirza
  • Thierry Verdier

Abstract

In this article, we assess the impact of counterterrorism measures on trade. Our work brings three value addition to the literature: (1) it develops a simple theory to emphasize the endogeneity between terrorism acts, counterterrorism measures, and trade; (2) it delivers an original strategy to identify empirically the effect of counterterrorism security measures on trade flows (using third country incidents); and (3) it uses a new data set on business visas issued by the United States to test further the hypothesis that terrorism is affecting trade through the security channel. Our results suggest that counterterrorism security measures matter for US imports. The level of the impact is up to three times higher when the acts result in a relatively high number of victims, when the products are sensitive to shipping time, or when they ask for networks and business people mobility in order to be sold.

Suggested Citation

  • Daniel Mirza & Thierry Verdier, 2014. "Are Lives a Substitute for Livelihoods? Terrorism, Security, and US Bilateral Imports," Journal of Conflict Resolution, Peace Science Society (International), vol. 58(6), pages 943-975, September.
  • Handle: RePEc:sae:jocore:v:58:y:2014:i:6:p:943-975
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bandyopadhyay, Subhayu & Sandler, Todd & Younas, Javed, 2016. "Trade and Terrorism: A Disaggregated Approach," Working Papers 2016-1, Federal Reserve Bank of St. Louis, revised 30 Jan 2017.
    2. Mirza, Daniel & Verdier, Thierry, 2008. "International trade, security and transnational terrorism: Theory and a survey of empirics," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 179-194, June.
    3. Matthieu Crozet & Pamina Koenig & Vincent Rebeyrol, 2008. "Exporting to Insecure Markets: a Firm-Level Analysis," Working Papers 2008-13, CEPII research center.
    4. Anderson, James E., 2015. "Terrorism, trade and public policy," Research in Economics, Elsevier, vol. 69(2), pages 180-190.
    5. Bandyopadhyay, Subhayu & Sandler, Todd & Younas, Javed, 2017. "Terms-of-Trade and Counterterrorism Externalities," Working Papers 2017-17, Federal Reserve Bank of St. Louis.
    6. Christophe Gouel & Nina Kousnetzoff & Hassan Salman, 2008. "Commerce international et transports : tendances du passe et prospective 2020," Working Papers 2008-28, CEPII research center.
    7. Zouheir El-Sahli, 2017. "The Role of Inbound Tourist Flows in Promoting Exports," AMSE Working Papers 1721, Aix-Marseille School of Economics, Marseille, France.

    More about this item

    Keywords

    terrorism; trade; security;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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