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Trade and the Spillovers of Transnational Terrorism

Summary

We examine the impact of transnational terrorism diffusion on security and international trade. To counter the diffusion of transnational terrorism, targeted governments implement security measures against countries where terror could potentially diffuse. Since security measures raise trade costs, we argue that countries, close enough to those from where terror originates, should experience negative spillovers on their trade. We find evidence for this hypothesis in our data. We show that the closer a country is to a source of terrorism, the higher the negative spillovers on its trade.

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Correspondence to José de Sousa.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( https://creativecommons.org/licenses/by/2.0 ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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de Sousa, J., Mirza, D. & Verdier, T. Trade and the Spillovers of Transnational Terrorism. Swiss J Economics Statistics 145, 453–461 (2009). https://doi.org/10.1007/BF03399291

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  • DOI: https://doi.org/10.1007/BF03399291

JEL-Classification

  • F12
  • F13

Keywords

  • terrorism
  • trade
  • security