<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The aim of this study is to investigate the influence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes fixed effects regression with Driscoll and Kraay standard error and cushions the effect of simultaneity and reverse causality using the lags of the regressors as instruments. The empirical results reveal the negative effect of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net effect of military expenditure on the relationship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to offset the negative effect of terrorism on FDI. The study recommends that counter-terrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance.</p>
</abstract>

The aim of this study is to investigate the influence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes fixed effects regression with Driscoll and Kraay standard error and cushions the effect of simultaneity and reverse causality using the lags of the regressors as instruments. The empirical results reveal the negative effect of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net effect of military expenditure on the relationship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to offset the negative effect of terrorism on FDI. The study recommends that counter-terrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance.

Terrorism and investment in Africa: Exploring the role of military expenditure

Economics and Business Review

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Terrorism and investment in Africa: Exploring the role of military expenditure"}

The aim of this study is to investigate the influence of military expenditure on the relationship between terrorism and investment in twenty-four African...

Terrorism and investment in Africa: Exploring the role of military expenditure

Published Online: Jul 18, 2022

Page range: 92 - 112

Received: Jan 09, 2022

Accepted: Jun 25, 2022

DOI: https://doi.org/10.18559/ebr.2022.2.6

Keywords
terrorism, military expenditure, domestic investment, FDI

© 2022 Chimere O. Iheonu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Terrorism and investment in Africa: Exploring the role of military expenditure

Published Online: Jul 18, 2022

Page range: 92 - 112

Received: Jan 09, 2022

Accepted: Jun 25, 2022

DOI: https://doi.org/10.18559/ebr.2022.2.6

Keywordsterrorism, military expenditure, domestic investment, FDI

© 2022 Chimere O. Iheonu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
terrorism, military expenditure, domestic investment, FDI