Trade and the Spillovers of Transnational Terrorism
We examine the impact of transnational terrorism diffusion on security and international trade. To counter the diffusion of transnational terrorism, targeted governments implement security measures against countries where terror could potentially diffuse. Since security measures raise trade costs, we argue that countries, close enough to those from where terror originates, should experience negative spillovers on their trade. We find evidence for this hypothesis in our data. We show that the closer a country is to a source of terrorism, the higher the negative spillovers on its trade.
Volume (Year): 145 (2009)
Issue (Month): IV (December)
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- Anne-Célia Disdier & Keith Head, 2004.
"The Puzzling Persistence of the Distance Effect on Bilateral Trade,"
Development Working Papers
186, Centro Studi Luca d\'Agliano, University of Milano.
- Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, February.
- 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.
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