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The key goal of this research is to empirically determine the effects of terrorism on FDI of the selected EU and EEA member countries

Author

Listed:
  • Heri Beziæ

    (University of Rijeka, Faculty of Economics,Rijeka, Croatia)

  • Tomislav Galoviæ

    (University of Rijeka, Faculty of Economics,Rijeka, Croatia)

  • Petar Miševiæ

    (Croatian Chamber of Commerce, Zagreb, Croatia)

Abstract

The key goal of this research is to empirically determine the effects of terrorism on FDI of the selected EU and EEA member countries.The methodology is based on a system-GMM estimator for dynamic panel data models on a sample covering up to 29 countries, and 13-year periods from 2000 to 2013. The main results confirm that terrorism incidents, economic and institutional variables are found to depress FDI of analysed EU and EEA countries. It can be concluded that terrorism and institutional stability are most influential on FDI inflows of the observed EU and EEA countries. The results indicate that terrorist activities reduce security and confidence of investors in countries exposed to terrorist activities, reducing the inflow of foreign direct investment. The recommendations and proposals are given based on the results of empirical analysis.

Suggested Citation

  • Heri Beziæ & Tomislav Galoviæ & Petar Miševiæ, 2016. "The key goal of this research is to empirically determine the effects of terrorism on FDI of the selected EU and EEA member countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(2), pages 333-362.
    • Handle: RePEc:rfe:zbefri:v:34:y:2016:i:2:p:333-362
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    terrorism; GMM estimator; FDI; EU; EEA;
    All these keywords.

    JEL classification:

    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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