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Terrorism, Tears and Trade

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  • Nitsch, Volker

Abstract

In recent years, terrorism has become much more violent; the number of injuries and fatalities per terrorist incident has increased sizably. In this paper, I examine the effect of international terrorism on bilateral trade flows. Using a gravity model of trade, I analyze trade between more than 180 countries over the period from 1968 to 2003. I find that terrorism tends to reduce trade, with particularly strong effects for violent and more frequent attacks. Terrorism generally hurts exports and appears to benefit imports. On average, trade is lower for two years after an attack.

Suggested Citation

  • Nitsch, Volker, 2006. "Terrorism, Tears and Trade," Conference papers 331485, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331485
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    File URL: https://ageconsearch.umn.edu/record/331485/files/2246.pdf
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