FDI and Terrorism: Co-integration & Granger Causality

Abstract

Terrorist activities not only effects that particular region or country's infrastructure, but it also effects the financial well being of that country. Because such terrorist activities create instability and uncertainty in the country. This results loss of foreign investors’ confidence in that economy, thus decreasing the level of foreign investments. Similarly Pakistan is also facing this bitter reality of decreased foreign direct investment due to an increase in terrorist activities.

Variables: FDI , Terrorism