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Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis

Author

Listed:
  • Syed Jawad Hussain Shahzad

    () (COMSATS Institute of Information Technology)

  • Muhammad Zakaria

    () (COMSATS Institute of Information Technology)

  • Mobeen Ur Rehman

    () (COMSATS Institute of Information Technology)

  • Tanveer Ahmed

    () (COMSATS Institute of Information Technology)

  • Bashir Ahmed Fida

    () (Modern College of Business and Sciences)

Abstract

Abstract The study examines cointegration and causal relationship between FDI, terrorism and economic growth in Pakistan using quarterly frequencies for the period 1988–2010. For empirical analysis data is divided into two sub-periods i.e. pre 9/11 (1988–2001) and post 9/11 (2002–2010) periods. The results show that long run cointegration holds between FDI, terrorism and economic growth. Granger causality results indicate that there is bidirectional short and long run causality between economic growth and FDI for both sub-samples. These findings are supported by variance decomposition and impulse response analysis. The findings suggest applicability of modernization theory to explain FDI and economic growth relationship. The results also reveal that terrorism has a deteriorating impact on FDI.

Suggested Citation

  • Syed Jawad Hussain Shahzad & Muhammad Zakaria & Mobeen Ur Rehman & Tanveer Ahmed & Bashir Ahmed Fida, 2016. "Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 179-194, May.
  • Handle: RePEc:spr:soinre:v:127:y:2016:i:1:d:10.1007_s11205-015-0950-5
    DOI: 10.1007/s11205-015-0950-5
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Fuel Exports, Aid and Terrorism," Research Africa Network Working Papers 17/016, Research Africa Network (RAN).
    2. repec:eee:glofin:v:37:y:2018:i:c:p:227-247 is not listed on IDEAS
    3. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Conditional linkages between iron ore exports, foreign aid and terrorism," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 29(2), pages 57-70, December.
    4. repec:spr:qualqt:v:52:y:2018:i:5:d:10.1007_s11135-017-0671-8 is not listed on IDEAS
    5. Simplice Asongu & John Ssozi, 2017. "When is Foreign Aid Effective in Fighting Terrorism? Threshold Evidence," International Economic Journal, Taylor & Francis Journals, vol. 31(3), pages 370-389, July.
    6. repec:eme:ijdipp:ijdi-08-2016-0046 is not listed on IDEAS
    7. Mansoor Maitah & Jehar Mustofa & Gok Ugur, 2017. "The Impact of Terrorist Attacks on Foreign Exchange Rate: Case Study of Turkish Lira versus Pound Sterling," Economies, MDPI, Open Access Journal, vol. 5(1), pages 1-8, January.
    8. Serfraz, Ayesha, 2017. "What is the effect of foreign direct investment inflows on economic growth in Pakistan? An empirical analysis in the light of religious sectarianism as catalyst for terrorism," Discussion Papers 59, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    9. Simplice Asongu & Oasis Kodila-Tedika, 2017. "Trade, aid and terror," International Journal of Development Issues, Emerald Group Publishing, vol. 16(1), pages 2-24, April.
    10. repec:cuf:journl:y:2019:v:20:i:1:shahzadqin is not listed on IDEAS
    11. Metaxas, Theodore & Kechagia, Polyxeni, 2017. "FDI and Terrorism in developing Asia: Approaches and Discussion," MPRA Paper 78165, University Library of Munich, Germany.

    More about this item

    Keywords

    FDI; Terrorism; Economic growth; Cointegration;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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