Terror Externalities and Trade: An Empirical Analysis

23 Pages Posted: 31 May 2019 Last revised: 1 Jun 2019

See all articles by Subhayu Bandyopadhyay

Subhayu Bandyopadhyay

Federal Reserve Bank of St. Louis - Research Division; IZA Institute of Labor Economics; West Virginia University

Hristos Doucouliagos

Deakin University - School of Accounting, Economics and Finance

Cong Si Pham

Deakin University - School of Accounting, Economics and Finance

Date Written: 2019-05-29

Abstract

We report robust evidence of adverse cross-border externalities from terrorism on trade for over 160 countries from 1976 to 2014. Terrorism in one country spills over to reduce trade in neighboring nations. These externalities arise from higher trade costs due to trade delays and macroeconomic uncertainty.

Keywords: Terrorism, Spillovers, Bilateral imports

JEL Classification: D74, F14, H56

Suggested Citation

Bandyopadhyay, Subhayu and Doucouliagos, Chris (Hristos) and Pham, Cong Si, Terror Externalities and Trade: An Empirical Analysis (2019-05-29). FRB St. Louis Working Paper No. 2019-17. Available at SSRN: https://ssrn.com/abstract=3396540 or http://dx.doi.org/10.20955/wp.2019.017

Subhayu Bandyopadhyay (Contact Author)

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
PO Box 442
St. Louis, MO 63011
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

West Virginia University ( email )

Morgantown, WV 26506-6025
United States
304-293-7879 (Phone)
304-293-7061 (Fax)

Chris (Hristos) Doucouliagos

Deakin University - School of Accounting, Economics and Finance ( email )

Burwood, Victoria 3215
Australia

Cong Si Pham

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

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