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International trade, security and transnational terrorism: Theory and a survey of empirics

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  • Daniel Mirza

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Thierry Verdier

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research, University of Southampton)

Abstract

In this paper, we offer a new and general analytical framework to illustrate the complex two-way interactions between trade and transnational terrorism. We then survey the recent economic literature in light of this framework by pointing to the importance in empirical studies of: (a) accounting for omitted variables that may be correlated with both terrorism and trade; (b) considering more seriously the intertemporal persistence of terrorism between specific pairs of countries as it affects GDP and GDP per capita regressors; (c) distinguishing the potential impact of incidents occurring in a particular country from the effects of incidents targeted towards or sourced in the country; and (d) most importantly, controlling appropriately for the potential endogeneity that prevails between terrorism, security measures and trade, very much ignored in the literature. Journal of Comparative Economics36 (2) (2008) 179-194.

Suggested Citation

  • Daniel Mirza & Thierry Verdier, 2008. "International trade, security and transnational terrorism: Theory and a survey of empirics," Post-Print halshs-00754282, HAL.
    • Handle: RePEc:hal:journl:halshs-00754282
    DOI: 10.1016/j.jce.2007.11.005
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    References listed on IDEAS

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