Aid in modulating the impact of terrorism on FDI: No positive thresholds, no policy

Arbeitspapier

We investigate how foreign aid dampens the effects of terrorism on FDI using interactive quantile regressions. The empirical evidence is based on 78 developing countries for the period 1984-2008. Bilateral and multilateral aid variables are used, while terrorism dynamics entail: domestic, unclear, transnational and total number of terrorist attacks. The main finding is that foreign aid cannot be used as a policy tool to effectively address a hypothetically negative effect of terrorism on FDI. The positive threshold we cannot establish is important for policy makers because it communicates a cut-off point at which foreign aid completely neutralizes the negative effect of terrorism on FDI. From the conditioning information set, we also establish for the most part that the effects of GDP growth, infrastructural development and trade openness are an increasing function of FDI. Policy implications are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: AGDI Working Paper ; No. WP/17/061

Classification and Topics

• Classification: Wirtschaft ; Model Evaluation, Validation, and Selection ; Conflict; Conflict Resolution; Alliances; Revolutions ; Multinational Firms; International Business ; Foreign Aid ; Economic Growth and Aggregate Productivity: General
• Subject: FDI ; Foreign aid ; Terrorism ; Quantile regression

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Asongu, Simplice ; Efobi, Uchenna Rapuluchukwu ; Beecroft, Ibukun
• Event: Veröffentlichung
• (who): African Governance and Development Institute (AGDI)
• (where): Yaoundé
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/191323
• Last update: 10.03.2025, 11:44 AM CET