Impact of Terrorism on FDI Flows to Pakistan

30 Pages Posted: 8 Jul 2014

See all articles by Murtaza Haider

Murtaza Haider

Ryerson University

Amar Anwar

Cape Breton University - Shannon School of Business

Date Written: July 8, 2014

Abstract

This study explores the adverse impacts of terrorism on the net Foreign Direct Investment (FDI) flows to Pakistan. Since 2003, terrorist violence has killed over 52,000 individuals in Pakistan. The unrelenting violence has substantially increased investment and security risks. This study uses time series econometrics to develop theoretically and empirically sound estimates for the impact of terrorism on FDI flows. This study has found that an increase in terrorist violence reduces FDI. Furthermore, the disaggregated analysis by individual sectors explores the nuances in considerations for FDI, where some sectors are affected while others remain immune to terrorism-related risks.

Keywords: Foreign Direct Investment; Terrorism; Pakistan; ARMAX Model

JEL Classification: F23; D74; N45

Suggested Citation

Haider, Murtaza and Anwar, Amar, Impact of Terrorism on FDI Flows to Pakistan (July 8, 2014). Available at SSRN: https://ssrn.com/abstract=2463543 or http://dx.doi.org/10.2139/ssrn.2463543

Murtaza Haider

Ryerson University ( email )

Ryerson University
350 Victoria Street
Toronto, Ontario M5B 2K3
Canada
416-979-5000, x2480 (Phone)

Amar Anwar (Contact Author)

Cape Breton University - Shannon School of Business ( email )

P.O.Box 5300, 1250 Grand Lake Road
Sydney, Nova Scotia B1P 6L2
Canada
9025631883 (Phone)

HOME PAGE: http://www.cbu.ca/profiles/amar-anwar

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