IDEAS home Printed from https://ideas.repec.org/p/bsu/wpaper/200801.html
   My bibliography  Save this paper

Warfare, Civil Conflict and the Spatial Impacts on Domestic Investment: Evidence from South America, 1950-2000

Author

Listed:
  • Michael Hicks

    (Bureau of Business Research and Department of Economics, Ball State University)

  • Major Jeffrey S Smith

    (Graduate School of Engineering and Management, Air Force Institute of Technology)

Abstract

This paper reports the effect of intra and international conflict on domestic investment in South America from 1950-2000. We combine data from the Penn World Table 6.1 and the Militarized Interstate Dispute Dataset from the Correlates of War project in a spatial investment accelerator model. We find that the magnitude of conflicts (total fatal casualties) is associated with diminished domestic investment, in magnitudes that range from 0.1 percent to one third of total investment across South America's experience in civil wars, conflicts and ethnic wars. We find no evidence of spatial spillovers in South America's civil wars. The paucity of international conflicts in the region leads us to conclude there is no more than suggestive evidence of large impacts and spatial spillovers of international conflicts.

Suggested Citation

  • Michael Hicks & Major Jeffrey S Smith, 2008. "Warfare, Civil Conflict and the Spatial Impacts on Domestic Investment: Evidence from South America, 1950-2000," Working Papers 200801, Ball State University, Department of Economics, revised Apr 2008.
    • Handle: RePEc:bsu:wpaper:200801
    as

    Download full text from publisher

    File URL: http://econfac.bsu.edu/research/workingpapers/bsuecwp200801hicks.pdf
    File Function: First version, 2008
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Reuven Glick & Alan M. Taylor, 2010. "Collateral Damage: Trade Disruption and the Economic Impact of War," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 102-127, February.
    2. Gupta, Sanjeev & Clements, Benedict & Bhattacharya, Rina & Chakravarti, Shamit, 2004. "Fiscal consequences of armed conflict and terrorism in low- and middle-income countries," European Journal of Political Economy, Elsevier, vol. 20(2), pages 403-421, June.
    3. Faten Ghosn & Glenn Palmer & Stuart A. Bremer, 2004. "The MID3 Data Set, 1993—2001: Procedures, Coding Rules, and Description," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(2), pages 133-154, April.
    4. A. Bhargava & L. Franzini & W. Narendranathan, 2006. "Serial Correlation and the Fixed Effects Model," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 4, pages 61-77, World Scientific Publishing Co. Pte. Ltd..
    5. James C. Murdoch & Todd Sandler, 2002. "Economic Growth, Civil Wars, and Spatial Spillovers," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 91-110, February.
    6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    7. David H. Bearce & Eric O'N. Fisher, 2002. "Economic Geography, Trade, and War," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(3), pages 365-393, June.
    8. Blomberg, S. Brock & Hess, Gregory D. & Orphanides, Athanasios, 2004. "The macroeconomic consequences of terrorism," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1007-1032, July.
    9. Tony Addison & Alemayehu Geda & Philippe Le Billon & S Mansoob Murshed, 2005. "Reconstructing and Reforming the Financial System in Conflict and 'Post-Conflict' Economies," Journal of Development Studies, Taylor & Francis Journals, vol. 41(4), pages 703-718.
    10. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    11. Marwah Kanta & Klein Lawrence R., 2005. "Lost Productivity and Defense Burden of the Southern Cone of Latin America: A Page from History," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 11(1), pages 1-28, May.
    12. repec:bla:revinw:v:42:y:1996:i:2:p:149-63 is not listed on IDEAS
    13. Reuven Glick & Alan M. Taylor, 2010. "Collateral Damage: Trade Disruption and the Economic Impact of War," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 102-127, February.
    14. Marwah Kanta & Klein Lawrence R. & Scheetz Thomas, 2000. "Growth and Productivity Costs of Military Expenditure in Bolivia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 6(3), pages 1-16, July.
    15. Kanta Marwah & Lawrence R. Klein, 2004. "Lost Productivity and Defense Burden of the Southern Cone of Latin America," Carleton Economic Papers 04-01, Carleton University, Department of Economics, revised May 2005.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caruso, Raul, 2011. "International Relative Prices and Civil Wars in Sub-Saharan Africa. Theory and Evidence over the period (1995-2006)," MPRA Paper 29761, University Library of Munich, Germany.
    2. Kollias Christos & Papadamou Stephanos & Psarianos Iacovos, 2014. "Rogue State Behavior and Markets: the Financial Fallout of North Korean Nuclear Tests," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(2), pages 267-292, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sevastianova Daria, 2009. "Impact of War on Country per Capita GDP: A Descriptive Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 15(1), pages 114-139, December.
    2. James P. Smirnoff & Michael J. Hicks, 2008. "The impact of economic factors and acquisition reforms on the cost of defense weapon systems," Review of Financial Economics, John Wiley & Sons, vol. 17(1), pages 3-13.
    3. Halkos, George E. & Aslanidis, Panagiotis – Stavros C., 2023. "Sustainable energy development in an era of geopolitical multi-crisis. Applying productivity indices within institutional framework," Resources Policy, Elsevier, vol. 85(PB).
    4. repec:rre:publsh:v:39:y:2009:i:1:p:73-83 is not listed on IDEAS
    5. Öztürk, Gamze & Yetkiner, Hakan & Özden, Elif, 2020. "Macroeconomic determinants of antidepressant use," Journal of Policy Modeling, Elsevier, vol. 42(6), pages 1394-1407.
    6. Jong-Wha Lee & Ju Hyun Pyun, 2016. "Does Trade Integration Contribute to Peace?," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 327-344, February.
    7. Serhan Cevik & John Ricco, 2020. "Shock and awe? Fiscal consequences of terrorism," Empirical Economics, Springer, vol. 58(2), pages 723-748, February.
    8. Jong-Wha Lee & Ju Hyun Pyun, 2016. "Does Trade Integration Contribute to Peace?," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 327-344, February.
    9. Qureshi, Mahvash Saeed, 2013. "Trade and thy neighbor's war," Journal of Development Economics, Elsevier, vol. 105(C), pages 178-195.
    10. Şahin AKKAYA & Ferda Yerdelen TATOĞLU & Ufuk BAKKAL, 2021. "Fiscal competition and public expenditure composition in the era of globalization: Panel data analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(626), S), pages 167-182, Spring.
    11. Meierrieks, Daniel & Schneider, Friedrich, 2021. "Terrorism and international economic policy," European Journal of Political Economy, Elsevier, vol. 69(C).
    12. Yamarik Steven J & Johnson Noel D & Compton Ryan A, 2010. "War! What Is It Good For? A Deep Determinants Analysis of the Cost of Interstate Conflict," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-35, September.
    13. Alfred Garloff & Carsten Pohl & Norbert Schanne, 2013. "Do small labor market entry cohorts reduce unemployment?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(15), pages 379-406.
    14. Ayhan, Fatih & Elal, Onuray, 2023. "The IMPACTS of technological change on employment: Evidence from OECD countries with panel data analysis," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    15. Mohamed Amine BOUTABA, 2009. "Does Carbon Affect European Oil Companies' Equity Values?," EcoMod2009 21500018, EcoMod.
    16. Trang Nguyen & Huu Nhan Duong & Harminder Singh, 2016. "Stock Market Liquidity and Firm Value: An Empirical Examination of the Australian Market," International Review of Finance, International Review of Finance Ltd., vol. 16(4), pages 639-646, December.
    17. Nils‐Petter Lagerlöf & Thomas Tangerås, 2008. "From rent seeking to human capital: a model where resource shocks cause transitions from stagnation to growth," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(3), pages 760-780, August.
    18. Llussá, Fernanda & Tavares, José, 2011. "Which terror at which cost? On the economic consequences of terrorist attacks," Economics Letters, Elsevier, vol. 110(1), pages 52-55, January.
    19. Blake, David & Caulfield, Tristan & Ioannidis, Christos & Tonks, Ian, 2014. "Improved inference in the evaluation of mutual fund performance using panel bootstrap methods," Journal of Econometrics, Elsevier, vol. 183(2), pages 202-210.
    20. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.
    21. Aynur Pala, 2014. "The Effect of Valuation Ratios, Gold Price, and Petroleum Price on Equity Returns: A Comparison of Static Panel and Quantile Regressions," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(1), pages 80-89, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bsu:wpaper:200801. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tung Liu (email available below). General contact details of provider: https://edirc.repec.org/data/debsuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.