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 countries for the period 2001 to 2018. The study utilizes fixed effects regression with Driscoll and Kraay standard error and cushions the effect...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2022-07-01
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| Series: | Economics and Business Review |
| Subjects: | |
| Online Access: | https://doi.org/10.18559/ebr.2022.2.6 |
| _version_ | 1818159904488161280 |
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| author | Iheonu Chimere O. Ichoku Hyacinth E. |
| author_facet | Iheonu Chimere O. Ichoku Hyacinth E. |
| author_sort | Iheonu Chimere O. |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-12-11T15:53:24Z |
| format | Article |
| id | doaj.art-8d92321292c041b4bcf95683ba950065 |
| institution | Directory Open Access Journal |
| issn | 2450-0097 |
| language | English |
| last_indexed | 2024-12-11T15:53:24Z |
| publishDate | 2022-07-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Economics and Business Review |
| spelling | doaj.art-8d92321292c041b4bcf95683ba9500652022-12-22T00:59:31ZengSciendoEconomics and Business Review2450-00972022-07-01829211210.18559/ebr.2022.2.6Terrorism and investment in Africa: Exploring the role of military expenditureIheonu Chimere O.0Ichoku Hyacinth E.1University of Nigeria, Department of Economics, Nsukka, University Road, Enugu 410001, NigeriaUniversity of Nigeria, Department of Economics, Nsukka, University Road, Enugu 410001, NigeriaThe 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.https://doi.org/10.18559/ebr.2022.2.6terrorismmilitary expendituredomestic investmentfdic23c26h12e20 |
| spellingShingle | Iheonu Chimere O. Ichoku Hyacinth E. Terrorism and investment in Africa: Exploring the role of military expenditure Economics and Business Review terrorism military expenditure domestic investment fdi c23 c26 h12 e20 |
| title | Terrorism and investment in Africa: Exploring the role of military expenditure |
| title_full | Terrorism and investment in Africa: Exploring the role of military expenditure |
| title_fullStr | Terrorism and investment in Africa: Exploring the role of military expenditure |
| title_full_unstemmed | Terrorism and investment in Africa: Exploring the role of military expenditure |
| title_short | Terrorism and investment in Africa: Exploring the role of military expenditure |
| title_sort | terrorism and investment in africa exploring the role of military expenditure |
| topic | terrorism military expenditure domestic investment fdi c23 c26 h12 e20 |
| url | https://doi.org/10.18559/ebr.2022.2.6 |
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