Can foreign aid dampen the threat of terrorism to international trade? Evidence from 78 developing countries

Arbeitspapier

The study investigates whether development assistance can be used to crowd-out the negative effect of terrorism on international trade. The empirical evidence is based on a panel of 78 developing countries for the period 1984-2008 and Quantile Regressions. The following main findings are established. First, bilateral aid significantly reduces the negative effect of transnational terrorism on trade in the top quantiles of the trade distribution. Second, multilateral aid also significantly mitigates the negative effect of terrorism dynamics on trade in the top quantiles of the trade distributions. It follows that it is primarily in countries with above median levels of international trade that development assistance can be used as an effective policy tool for dampening the adverse effects of terrorism on trade. Practical implications are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: AGDI Working Paper ; No. WP/18/032

Classification and Topics

• Classification: Wirtschaft ; Macroeconomic Aspects of International Trade and Finance: General ; Multinational Firms; International Business ; Foreign Aid ; Natural Resources and Domestic and International Conflicts ; Economic Growth and Aggregate Productivity: General
• Subject: Exports ; Foreign Aid ; Terrorism ; Development

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Asongu, Simplice ; Leke, Ivo J.
• Event: Veröffentlichung
• (who): African Governance and Development Institute (AGDI)
• (where): Yaoundé
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/204964
• Last update: 10.03.2025, 11:42 AM CET