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Abstract This paper attempts to identify the determinants of foreign direct investment (FDI), focusing especially on terrorism and keeping in mind that FDI is one of the key economic growth engines. The main goal of this paper was to determine the correlation between terrorism and investment activities. The method used is a dynamic panel data model (System 2 step-GMM estimator), based on a sample covering a total of 36 OECD economies in the period from 2005 to 2018. The findings indicate that terrorist incidents and economic, institutional, and natural variables have different impacts on FDI in the OECD Member countries. The research found a statistically significant impact of terrorist incidents and natural disasters and a strong impact of economic and institutional variables.
Galović et al. (Thu,) studied this question.