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Does Violence Deter Investment, Hinder Economic Growth?

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  • Loureiro, Paulo R. A.
  • Silva, Emilson Caputo Delfino

Abstract

Using a panel of developed and developing countries, we investigate whether a country’s investment and economic growth rate are negatively related to its violence level. Using GMM and Arelano-Bond procedures we found that violence is a strong deterrent to investment and thus hinders economic growth. Furthermore, we use a broader measure of violence that is able to account for civil war and violent deaths not reported as homicides. This broader measure of violence outperforms intentional homicides in explaining the effect of violence on both investment and economic growth.

Suggested Citation

  • Loureiro, Paulo R. A. & Silva, Emilson Caputo Delfino, 2010. "Does Violence Deter Investment, Hinder Economic Growth?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 30(1), October.
    • Handle: RePEc:sbe:breart:v:30:y:2010:i:1:a:3500
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    6. Rabia Haroon & Zainab Jehan, 2022. "Measuring the impact of violence on macroeconomic instability: evidence from developing countries," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(1), pages 3-30, January.
    7. Vusal Murselzade & Behiye Cavusoglu, 2021. "Relationship between the Service Sector and Economic Growth: Evidence from China," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 8(1), pages 15-22.

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