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Fuel Exports, Aid and Terrorism

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  • Asongu, Simplice
  • Nwachukwu, Jacinta

Abstract

This study employs interactive quantile regressions to assess the conditional role of foreign aid in reducing the potentially negative effect of terrorism on fuel exports in 78 developing countries for the period 1984-2008. Bilateral and multilateral aid indicators are used whereas terrorism includes: domestic, transnational, unclear and total terrorism dynamics. Interactive quantile regressions are used. The following findings are established. First, the effects of terrorism are both positive and negative across quantiles and specifications, with the impact most apparent in the highest and lowest quantiles. Second, while bilateral aid consistently decreases (increases) fuel exports at the top (bottom) quantiles, multilateral aid regularly decreases fuel exports in the top quantiles. Third, for negative thresholds in the 50th quartile and 90th decile, interaction effects between bilateral aid and terrorism dynamics are overwhelmingly not significant. Conversely, for transnational terrorism, the interaction effects between multilateral aid and terrorism dynamics significantly have negative thresholds. The hypothesis of a positive threshold is only confirmed for transnational terrorism and multilateral aid at the 90th decile. Justifications for unexpected signs and implications for fuel export policy and the management of multinational companies are discussed. This study contributes to the literature on the role of external flows in reducing the negative externalities of terrorism on development outcomes.

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  • Asongu, Simplice & Nwachukwu, Jacinta, 2017. "Fuel Exports, Aid and Terrorism," MPRA Paper 81188, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:81188
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    Cited by:

    1. Simplice A. Asongu & Uchenna R. Efobi & Ibukun Beecroft, 2021. "Aid in Modulating the Impact of Terrorism on FDI: No Positive Thresholds, No Policy," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 432-456, October.
    2. Simplice A. Asongu & Vanessa S. Tchamyou & Ndemaze Asongu & Nina Tchamyou, 2018. "The Comparative African Economics of Governance in Fighting Terrorism," Research Africa Network Working Papers 18/055, Research Africa Network (RAN).
    3. Kazeem B. Ajide & Olorunfemi Y. Alimi & Simplice A. Asongu, 2019. "Ethnic Diversity and Inequality in Sub-Saharan Africa: Do Institutions Reduce the Noise?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(3), pages 1033-1062, October.
    4. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2022. "Does terrorism affect greenfield investment? A structural gravity approach," ThE Papers 22/06, Department of Economic Theory and Economic History of the University of Granada..
    5. Edmore Mahembe & Nicholas Mbaya Odhiambo, 2021. "Does foreign aid reduce poverty? A dynamic panel data analysis for sub-Saharan African countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 875-893, December.
    6. Zheng, Linglin (Gloria) & Wechtler, Heidi M. & Heyden, Mariano L.M. & Bouncken, Ricarda B., 2024. "Global disasters and the luck of the draw? A serendipity perspective on MNE responses to global disasters," Journal of International Management, Elsevier, vol. 30(1).

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    More about this item

    Keywords

    Exports; Foreign Aid; Terrorism; Natural Resources; Development;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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