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A bad turn deserves another: linkages between terrorism, capital flight and industrialisation
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A bad turn deserves another: linkages between terrorism, capital flight and industrialisation

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  • Asongu, Simplice
  • Nnanna, Joseph
  • Nting, Rexon

Abstract

This study examines how the association between terrorism and capital flight affects the process of industrialization in 36 African countries. The empirical evidence is based on Generalised Method of Moments (GMM) and Quantile Regressions (QR). GMM-oriented findings show that capital flight interacts with terrorism to negatively affect industrialisation in ‘domestic terrorism’- and ‘total terrorism’-oriented regressions. With QR approach, the GMM results are confirmed exclusively in the 25th and 50th quantiles, in regressions pertaining to domestic terrorism, unclear terrorism and total terrorism. It follows that the negative effect from the investigated interaction is driven by bottom quantiles of the industrialisation distribution. This confirms existing literature that developed countries are more likely to limit the negative externalities from terrorism compared to their developing counterparts. Hence, the negative consequence of the association between terrorism and capital flight on industrialisation is a decreasing function of industrialisation.

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  • Asongu, Simplice & Nnanna, Joseph & Nting, Rexon, 2021. "A bad turn deserves another: linkages between terrorism, capital flight and industrialisation," MPRA Paper 109900, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:109900
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    Cited by:

    1. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2022. "Tourism, ICT and inclusive development: global evidence," Working Papers 22/037, European Xtramile Centre of African Studies (EXCAS).
    2. Tii N. Nchofoung & Simplice A. Asongu & Vanessa S. Tchamyou, 2021. "The political implication of women and industrialisation in Africa," Research Africa Network Working Papers 21/072, Research Africa Network (RAN).
    3. Simplice A. Asongu & Joel Hinaunye Eita, 2023. "Promoting renewable energy consumption in Sub-Saharan Africa: how capital flight crowds-out the favorable effect of foreign aid," Working Papers 23/048, European Xtramile Centre of African Studies (EXCAS).
    4. Kingsley K. Arthur & Simplice A. Asongu & Peter Darko & Marvin O. Ansah & Sampson Adom & Omega Hlortu, 2024. "Financial Crimes in Africa and Economic Growth: Implications for Achieving Sustainable Development Goals (SDGs)," Working Papers of the African Governance and Development Institute. 24/029, African Governance and Development Institute..
    5. Simplice Asongu & Nicholas M. Odhiambo, 2024. "The role of foreign aid in the nexus between capital flight and unemployment in sub-Saharan Africa," Working Papers 24/007, European Xtramile Centre of African Studies (EXCAS).
    6. Sini, Snow & Abdul-Rahim, A.S. & Chin, Lee & Said, Rusmawati & Sulaiman, Chindo, 2022. "Natural resources’ impact on capital flow and conflict relationship in Africa: A novel insight from GMM and quantile regression," Resources Policy, Elsevier, vol. 78(C).
    7. Dieudonné Mignamissi & Bernard Nguekeng, 2022. "Trade openness-industrialization nexus revisited in Africa," Economic Change and Restructuring, Springer, vol. 55(4), pages 2547-2575, November.

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    More about this item

    Keywords

    Capital flight; terrorism; industrialisation; Africa;
    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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