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New Terrorism and Capital Flight: Pre and Post Nine Eleven analysis for Asia

Author

Listed:
  • Umer Shahzad

    (School of Economics, Shandong University)

  • Fengming Qin

    (School of Economics, Shandong University)

Abstract

The study examines the role of terrorism and military expenditures towards capital flight for two sub-regions of Asia (South Asia and Asia Pacific) using the annual data for the period 1990-2015. The empirical analysis is conducted on two sub-samples pre nine eleven (1990-2001) and post nine eleven (20022015) periods. The findings are supported by robust tests by applying quantile regression and two stage GMM. The empirical estimations highlight that terrorism attacks induce to increase capital flight from Asian countries in full panel, pre nine eleven and post nine eleven periods. Military expenditures illustrates important role to modulate the adverse effect of terrorist attacks on capital flight. In summary, the study recommends multiple policy implications to control the increasing pace of capital flight from Asian countries. The empirical findings suggest the applicability of modernization theory to explain the capital flow and growth nexus.

Suggested Citation

  • Umer Shahzad & Fengming Qin, 2019. "New Terrorism and Capital Flight: Pre and Post Nine Eleven analysis for Asia," Annals of Economics and Finance, Society for AEF, vol. 20(1), pages 465-487, May.
    • Handle: RePEc:cuf:journl:y:2019:v:20:i:1:shahzadqin
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    More about this item

    Keywords

    Capital flight; Military expenditures; Terrorism; Asia;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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