Original scientific paper
The impact of terrorism on the FDI of the EU and EEA Countries
Heri Bezić
; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Tomislav Galović
orcid.org/0000-0002-0891-796X
; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Petar Mišević
; Croatian Chamber of Commerce, Zagreb, Croatia
Abstract
Abstract
The key goal of this research is to empirically determine the effects of terrorism on
FDI of the selected EU and EEA member countries. The methodology is based on
a system-GMM estimator for dynamic panel data models on a sample covering up
to 29 countries, and 13-year periods from 2000 to 2013. The main results confirm
that terrorism incidents, economic and institutional variables are found to depress
FDI of analysed EU and EEA countries. It can be concluded that terrorism and
institutional stability are most influential on FDI inflows of the observed EU and
EEA countries. The results indicate that terrorist activities reduce security and
confidence of investors in countries exposed to terrorist activities, reducing the
inflow of foreign direct investment. The recommendations and proposals are given
based on the results of empirical analysis.
Keywords
Terrorism; GMM estimator; FDI; EU; EEA
Hrčak ID:
171140
URI
Publication date:
22.12.2016.
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