Trade and the Spillovers of Transnational Terrorism
- 16 Downloads
We examine the impact of transnational terrorism diffusion on security and international trade. To counter the diffusion of transnational terrorism, targeted governments implement security measures against countries where terror could potentially diffuse. Since security measures raise trade costs, we argue that countries, close enough to those from where terror originates, should experience negative spillovers on their trade. We find evidence for this hypothesis in our data. We show that the closer a country is to a source of terrorism, the higher the negative spillovers on its trade.
Keywordsterrorism trade security
- Cainkar, L. (2004), “The Impact of September 11 Attacks and the Aftermath on Arab and Muslim Communities in the United States”, GSC Quarterly, 13.Google Scholar
- de Sousa, J., D. Mirza, and T. Verdier (2009), “Trade and Terrorism: Does the Neighbor Hurt”, Mimeo.Google Scholar
- Mickolus, E., T. Sandler, J. Murdock, and P. Flemming (2004), International Terrorism: Attributes of Terrorist Events, 1968–2003 (ITERATE 5), Dunn Loring, VA: Vinyard Software.Google Scholar
- Mirza D., and T. Verdier (2006), “Are Lives Substitute to Livelihoods: Terrorism, Security and US Bilateral Imports”, CEPR working paper 6173.Google Scholar
- Steinberg, G. (2008), “The Islamic Jihad Union”, SWP Comments paper series.Google Scholar
- Voeten, Erik, and Adis Merdzanovic, “United Nations General Assembly Voting Data”, http://hdl.handle.net/1902.1/12379, (object name UNF:3:Hpf6qOkDdzzvXF9m66yLTg==, accessed 2009).