Economic consequences of terrorism: Geography matters

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Friday 25 October 2013


Coombs Seminar Room A, Coombs Building, Fellows Road, ANU


Omer Majeed, PhD candidate, Arndt-Corden Department of Economics, Crawford School of Public Policy, ANU


Robert Sparrow

Terrorism can impose significant costs on an economy. This paper analyses the effect of geography on terrorism. In particular, this paper hypothesizes that a terrorist attack in financial hubs of a country will have significantly higher economic cost than a similar attack in a remote part of the country. This heterogeneity of the geography of terrorism has long been ignored in the literature, and as such is likely to be a significant contribution.

In particular, we focus on the case study of Pakistan and Net Foreign Direct Investment (NFDI). We find that terrorism in financials hubs of Pakistan has imposed a significant cost on NFDI, but similar attacks in remote areas have had insignificant impacts.

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