The Impact of Terrorism on International Trade: A Panel Study for SAARC Countries
DOI:
https://doi.org/10.61506/01.00377Keywords:
Terrorism, International trade, Panel data, ARDL model, SAARC nationAbstract
This study investigates the impact of terrorism on international trade among SAARC countries over the period 1990 to 2022. the study used international trade as a dependent variable, while Terrorism, GDP, Exchange rate and Real-world GDP are independent variables. Before going toward cointegration tests, the study used unit root tests and concluded that some variables were stationary at the level while others were stationary at the level. Unit root test results suggested using the PMG-ARDL model to estimate the long and short-run impact among variables. GDP positively correlates with trade, suggesting that economic growth encourages trade activities; exchange rate fluctuations have mixed effects depending on the appreciation or depreciation of the currency; and real-world GDP changes have a positive spillover effect on trade within the SAARC region and a significant positive impact on terrorism. Government policymakers should consider the issues of terrorism, insecurity, and law to reduce investor skepticism and fully actualize the potential of their trade hosting.
References
Abadie, A., & Gardeazabal, J. (2008). Terrorism and the world economy. European Economic Review, 52(1), 1-27. DOI: https://doi.org/10.1016/j.euroecorev.2007.08.005
Ahmad, K., Ali, A., & Yang, M. (2022). The effect of trade liberalization on expenditure structure of Pakistan. Bulletin of Business and Economics (BBE), 11(1), 73-84.
Ahmad, K., Safdar, A. L. I., & Amjad, A. L. I. (2018). Trade Revenue Implications of Trade Liberalization in Pakistan. Pakistan Journal of applied economics, 28(1), 27-50.
Ahmed, Z. S., & Bhatnagar, S. (2018). The India-Iran-Pakistan triad: Comprehending the correlation of geo-economics and geopolitics. Asian Studies Review, 42(3), 517-536. DOI: https://doi.org/10.1080/10357823.2018.1479728
Alzahrani, M. ., & Salah, O. B. . (2020). A Time Series Analysis of Bilateral Trade of India and Saudi Arabia. Journal of Business and Economic Options, 3(2), 72-82.
Andreou, E. . (2021). A Literature Survey Trade Policy Dynamics: Insights for Assessing Poverty and Inequality Impacts. Journal of Business and Economic Options, 4(4), 1-8.
Arshad, Z. ., & Mukhtar, S. . (2019). Understanding Pakistan’s Trade Dynamics: Import-Export Trends and Trade Balance Analysis. Journal of Business and Economic Options, 2(3), 115-122.
Asian Development Bank (ADB). (2019). Connecting South Asia and Southeast Asia. Manila: Asian Development Bank.
Audi, M., & Ali, A. (2018). Gender Gap and Trade Liberalization: An Analysis of some selected SAARC countries. Advances in Social Sciences Research Journal, 5(11). DOI: https://doi.org/10.14738/assrj.511.5329
Bahmani-Oskooee, M., & Harvey, H. (2017). Exchange rate volatility and the commodity trade between the U.S. and Brazil. The North American Journal of Economics and Finance, 42, 320-328
Bandyopadhyay, S., Sandler, T. M., & Younas, J. (2016). Terrorism, Trade and Welfare: Some Paradoxes and a Policy Conundrum. FRB St. Louis Working Paper, (2016-2). DOI: https://doi.org/10.20955/wp.2016.002
Bandyopadhyay, S., Sandler, T., & Younas, J. (2018). Trade and terrorism: A disaggregated approach. Journal of Peace Research, 55(5), 656-670.
Bandyopadhyay, S., Sandler, T., & Younas, J. (2018). Trade and terrorism: A disaggregated approach. Journal of Peace Research, 55(5), 656-670. DOI: https://doi.org/10.1177/0022343318763009
Berrebi, C., & Ostwald, J. (2011). Earthquakes, hurricanes, and terrorism: do natural disasters incite terror?. Public Choice, 149, 383-403.
Blomberg, S. B., & Hess, G. D. (2006). How much does violence tax trade? The Review of Economics and Statistics, 88(4), 599-612. DOI: https://doi.org/10.1162/rest.88.4.599
Blomberg, S. B., Hess, G. D., & Orphanides, A. (2004). The macroeconomic consequences of terrorism. Journal of monetary economics, 51(5), 1007-1032.
Blomberg, S. B., Hess, G. D., & Orphanides, A. (2004). The macroeconomic consequences of terrorism. Journal of monetary economics, 51(5), 1007-1032. DOI: https://doi.org/10.1016/j.jmoneco.2004.04.001
Cizakca, M. . (2024). Understanding the Determinants of Foreign Trade Volume in Turkiye: An Empirical Analysis. Journal of Business and Economic Options, 7(1), 19-28.
Egger, P., & Gassebner, M. (2015). International terrorism as a trade impediment?. Oxford Economic Papers, 67(1), 42-62. DOI: https://doi.org/10.1093/oep/gpu037
Enders, W., & Sandler, T. (2011). The political economy of terrorism. Cambridge University Press.do natural disasters incite terror?. Public Choice, 149, 383-403. DOI: https://doi.org/10.1007/s11127-011-9868-x
Equatora, M. A., Anwar, U., Saeed, H., & Hussain, S. M. (2023). Impact Of Terrorism On International Trade In Pakistan. Journal of Mental Health and Social Rehabilitation, 1(1), 15-25. DOI: https://doi.org/10.52472/jmhsr.v1i1.198
Estrada, M. A. R., Park, D., & Khan, A. (2018). The impact of terrorism on economic performance: The case of Turkey. Economic Analysis and Policy, 60, 78-88. DOI: https://doi.org/10.1016/j.eap.2018.09.008
Estrada, M. A. R., Park, D., Kim, J. S., & Khan, A. (2015). The economic impact of terrorism: a new model and its application to Pakistan. Journal of Policy Modeling, 37(6), 1065-1080. DOI: https://doi.org/10.1016/j.jpolmod.2015.08.004
Gasimli, O., Haq, I. U., Munir, S., Khalid, M. H., Gamage, S. K. N., Khan, A., & Ishtiaq, M. (2022). Globalization and sustainable development: empirical evidence from CIS countries. Sustainability, 14(22), 14684. DOI: https://doi.org/10.3390/su142214684
Haq, Z. U., Ullah, Z., & Iqbal, J. (2018). Terrorist incidents and trade. Global Social Sciences Review, 3(2), 55-70. DOI: https://doi.org/10.31703/gssr.2018(III-II).04
Hwang, J. ., & Lee, Y. . (2019). Exploring the Impact of Trade Openness on Unemployment: A Cross-Country Analysis. Journal of Business and Economic Options, 2(3), 123-131.
Irfan, M. ., & Sohail, F. . (2021). Exploring Import-Export Dynamics: A Time Series Analysis of Pakistan’s Trade Trends. Journal of Business and Economic Options, 4(2), 24-29.
K. Rai, S., & K. Sharma, A. (2020). Causal nexus between FDI inflows and its determinants in SAARC countries. South Asia Economic Journal, 21(2), 193-215. DOI: https://doi.org/10.1177/1391561420940838
Khalid, M. H., Ul Haq, I., Khan, D., & Abbas, K. (2022). Exploring the impact of economic structure on carbon emissions: a case study of Pakistan. International Journal of Energy Economics and Policy, 12(3), 425-431. DOI: https://doi.org/10.32479/ijeep.12989
Khan, A., & Ruiz Estrada, M. A. (2016). The effects of terrorism on economic performance: the case of Islamic State in Iraq and Syria (ISIS). Quality & Quantity, 50, 1645-1661. DOI: https://doi.org/10.1007/s11135-015-0226-9
Marsai, V., & Tarrósy, I. (2022). The potential for violent extremist organizations in Africa to take advantage of the COVID-19 pandemic crisis in ungoverned spaces: the cases of al-Shabaab and Boko Haram. African Security, 15(2), 163-185. DOI: https://doi.org/10.1080/19392206.2022.2077682
Mealli, F. . (2021). Currency Integration and Bilateral Trade: Evidence from the Eurozone. Journal of Business and Economic Options, 4(2), 30-34.
Mordecai, U. ., & Akinsola, A. . (2021). Navigating Economic Dynamics: Trade Liberalization and Demographic Trends in Nigeria. Journal of Business and Economic Options, 4(4), 30-36.
Naik, P. K. . (2020). Exploring Factors Shaping India’s Trade Patterns: Evidence from Major Trading Partners. Journal of Business and Economic Options, 3(4), 150-157.
Nanda, N., & Mitra, S.(2023) Environment and Sustainable Development in South Asia. In The Routledge Handbook of South Asia (pp. 276-292). Routledge India. DOI: https://doi.org/10.4324/9781003279662-22
Nitsch, V., & Schumacher, D . (2004). Terrorism and international trade: an empirical investigation. European Journal of Political Economy, 20(2), 423-433. DOI: https://doi.org/10.1016/j.ejpoleco.2003.12.009
Rose, A. (2007). Economic resilience to natural and man-made disasters: Multidisciplinary origins and contextual dimensions. Environmental hazards, 7(4), 383-398. DOI: https://doi.org/10.1016/j.envhaz.2007.10.001
Siddiqi, M. W., Ali, A., & Chani, M. I. (2014). Import demand, economic development and trade liberalization in Pakistan: an empirical analysis. Bulletin of Business and Economics (BBE), 3(2), 131-141.
Sun, Y. ., & Chang, Y. . (2020). Trade and Poverty in Developing Countries: Beyond Assumptions to Nuanced Understanding. Journal of Business and Economic Options, 3(4), 167-175.
Wang, Y. . (2023). Geopolitical Considerations in Sino-US Trade Relations. Journal of Business and Economic Options, 6(3), 17-25.
