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Terrorism and Trade

  • Volker Nitsch
  • Dieter Schumacher

bilateral trade flows between more than 200 countries over the period from 1960 to 1993. Applying an augmented gravity model that includes several measures of terrorism and largescale violence, we find compelling evidence that terrorist actions reduce the volume of trade; a doubling in the number of terrorist incidents is associated with a decrease in bilateral trade by about 4 percent.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.40608.de/dp353.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 353.

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Length: 13 p.
Date of creation: 2003
Date of revision:
Handle: RePEc:diw:diwwpp:dp353
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  1. Herschel I. Grossman, 2000. "The Creation of Effective Property Rights," NBER Working Papers 7897, National Bureau of Economic Research, Inc.
  2. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 7-46, 04.
  3. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
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