This Article Free Full Text (Free PDF) Free References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Enders, W. Articles by Sandler, T. Search for Related Content Social Bookmarking                   What's this?

The Impact of Transnational Terrorism on U.S. Foreign Direct Investment

University of Alabama

Adolfo Sachsida

Catholic University of Brasilia

Todd Sandler

University of Texas, Dallas

This article investigates the extent to which transnational terrorist attacks altered U.S. foreign direct investment (FDI). Time-series intervention analysis shows that 9/11 generally had little lasting influence on U.S. FDI flows. Only a few countries that experienced subsequent terrorist attacks displayed a post-9/11 drop in U.S. FDI flows, which, except for Turkey, was not long-lived. For a panel of countries, this study also examines the effect that terrorist attacks against U.S. interests had on the stock of U.S. FDI. Based on a methodology previously applied to the study of U.S. assets abroad, we find that such attacks had a significant, but small, impact on these stocks in OECD countries. Greece and Turkey displayed the largest declines—5.7 percent and 6.5 percent of their average U.S. FDI stocks, respectively. There was no such effect for non-OECD countries. Terrorist efforts to limit U.S. FDI have been cost-effective.

CiteULike    Connotea    Del.icio.us    Digg    Reddit    Technorati    What's this?