An Injury to One Is an Injury to All: Terrorism's Spillover Effects on Bilateral Trade

Arbeitspapier

In this paper we investigate whether the effects of terrorism in one country spillover to affect trade in neighboring nations. Using a sample of more than 160 countries from 1976 to 2014, we report robust evidence that terrorist attacks in a nation's contiguous neighbors significantly reduce bilateral trade. Each additional terrorist attack in a neighboring country reduces bilateral trade by nearly 0.013% on average, which translates into a reduction of about $6.4 million USD in total trade. Trade effects from terrorist incidents are higher in sub-Sahara. Adverse trade effects hold for different flow and stock measures of terrorism, and even for terrorist incidents with zero casualties. Spillovers from terrorism are relatively long-lived, depressing bilateral trade up to five years after a terrorist event. Our findings are consistent with terrorism adversely impacting bilateral trade through several channels: psychological distress, higher trade costs arising from increased trade insecurity and regulatory burden, and adverse effects on income and trade reform.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 10859

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Empirical Studies of Trade ; Conflict; Conflict Resolution; Alliances; Revolutions ; National Security and War
• Thema: terrorism ; spillovers ; bilateral trade

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Pham, Cong S. ; Doucouliagos, Chris
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2017

Weitere Informationen

• Handle: http://hdl.handle.net/10419/170843
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ