Conditional linkages between iron ore exports, foreign aid and terrorism

Asongu, Simplice and Nwachukwu, Jacinta (2016): Conditional linkages between iron ore exports, foreign aid and terrorism. Published in: Mineral Economics , Vol. 29, No. 2 (8 December 2016): pp. 57-70.

Abstract

We employ interactive quantile regressions to assess conditional linkages between foreign aid, iron ore exports and terrorism from a panel of 78 developing countries for the period 1984-2008. The following main findings are established. First, it is primarily in the countries with the highest level of iron ore exports that terrorism affects exports. Second, bilateral aid has an impact on iron ore exports, while the evidence for such a relationship between multilateral aid and iron ore exports is limited. Third, there is limited support for the main hypothesis motivating this line of inquiry, notably that foreign aid can be used to mitigate a potentially negative effect of terrorism on resource exports. The results suggest that bilateral aid is more relevant at mitigating the negative effects of domestic and total terrorism on iron ore exports.

• Item Type: MPRA Paper
• Language: English
• Keywords: Exports, Foreign Aid; Terrorism; Natural Resources; Development
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; F - International Economics > F3 - International Finance > F35 - Foreign Aid; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q34 - Natural Resources and Domestic and International Conflicts

References

Abadie, A., & Gardeazabal, J., (2008. “Terrorism and the world economy”, European Economic Review, 52(1), pp.1-27.

Aguirre, I., (2014). “Violence in South Sudan Threatens Chinese Oil Investment”, Global Risk Insights http://oilprice.com/Energy/Crude-Oil/Violence-In-South-Sudan-Threatens-Chinese-Oil-Investment.html (Accessed: 11/07/2015).

Akinwale, A. K., (2010). “Integrating the traditional and the modern conflict management strategies in Nigeria”, Department of Sociology, Faculty of Social Sciences, University of Ibadan, Nigeria.

Akpan, U., (2014). “Impact of Regional Road Infrastructure Improvement on Intra-Regional Trade in ECOWAS”, African Development Review, 16(S1), pp. 64-76.

Amavilah, V. H., (2015). “Social Obstacles to Technology, Technological Change, and the Economic Growth of African Countries: Some Anecdotal Evidence from Economic History”, MPRA Paper No. 63273.

Anderson, M., (2015), “Global cost of conflict reaches $14.3 tn, says report” , The guardian, http://www.theguardian.com/global-development/2015/jun/16/global-cost-conflict-reaches-14tn-says-report (Accessed: 27/06/2015).

Asongu, S. A., (2013). “Fighting corruption in Africa: do existing corruption-control levels matter?”, International Journal of Development Issues, 12(1), pp. 36-52.

Asongu, S. A., (2014a). “Globalization (fighting), corruption and development: How are these phenomena linearly and nonlinearly related in wealth effects?”, Journal of Economic Studies, 3(3), pp. 346-369.

Asongu, S. A., (2014b). “The impact of health worker migration on development dynamics: evidence of wealth effects from Africa”, The European Journal of Health Economics, 15(2), pp. 187-201.

Asongu, S. A., (2014c). “Financial development dynamics thresholds of financial globalisation: evidence from Africa”, Journal of Economic Studies, 41(2), pp. 166-195.

Asongu, S. A., (2014d). “The Questionable Economics of Development Assistance in Africa: Hot-Fresh Evidence, 1996-2010”, The Review of Black Political Economy, 41(4), pp. 455-480.

Asongu, S. A., (2015). “Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach”, African Governance and Development Institute Working Paper No. 15/009, Yaoundé.

Asongu, S. A., & Aminkeng, G. A. A., (2013). “The economic consequences of China-Africa relations: debunking myths in the debate”, Journal of Chinese Economic and Business Studies, 11(4), pp. 261-277.

Asongu, S. A., Efobi, U., & Beecroft, I., (2015). “FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries”, African Governance and Development Institute Working Paper No. 15/019, Yaoundé.

Asongu, S. A., & Kodila-Tedika, O., (2015a). “Trade, Aid and Terror”, African Governance and Development Institute Working Paper No. 15/028, Yaoundé.

Asongu, S. A., & Kodila-Tedika, O., (2015b). “Is Poverty in the African DNA (Gene)?”, African Governance and Development Institute Working Paper No. 15/011, Yaoundé.

Asongu, S. A., & Kodila-Tedika, O., (2016). “Fighting African Conflicts and Crime: Which Governance Tools Matter?”, International Journal of Social Economics: 43(5), pp. 466-485.

Asongu, S. A., & Nwachukwu, J. C., (2015a). “Revolution empirics: predicting the Arab Spring”, Empirical Economics: DOI: 10.1007%2Fs00181-015-1013-0

Asongu, S. A., & Nwachukwu, J. C., (2015b). “Fighting terrorism: empirics on policy harmonization”, African Governance and Development Institute Working Paper No. 15/024, Yaoundé.

Asongu, S. A., & Nwachukwu, J. C., (2016). “The Role of Lifelong Learning in Political Stability and Non-violence: Evidence from Africa”, Journal of Economic Studies, 43(1), pp. 141-164.

Bandyopadhyay, S., Sandler, T., & Younas, J., (2014). “Foreign direct investment, aid, and terrorism”, Oxford Economic Papers, 66(1), pp. 25-50.

Beets, S. D., (2005). “Understanding the Demand-Side Issues of International Corruption.” Journal of Business Ethics, 57 (1), pp. 65-81.

Bell, S. R., Clay, K. C., Murdie, A., & Piazza, J., (2014). “Opening Yourself Up: The Role of External and Internal Transparency in Terrorism Attacks”, Political Research Quarterly: doi:10.1177/1065912914527798.

Billger, S. M., & Goel, R. K., (2009), “Do existing corruption levels matter in controlling corruption? Cross-country quantile regression estimates”, Journal of Development Economics, 90, pp. 299-305.

Biscaye, P., Harris, K. P., Reynolds, T., & Anderson, C. L., (2015). “Relative Effectiveness of Bilateral and Multilateral Aid on Development and Social Outcomes”, Evans School of Policy Analysis and Research (EPAR) Brief No. 294, Seattle, Washington.

Black, D., (1990). The elementary forms of conflict management. New York, Plenum Press.

Borg, M. J., (1992). “Conflict management in the modern world-system”. Sociological Forum, 7(2), pp. 261-282.

Brambor, T., Clark, W. M., & Golder, M., (2006), “Understanding Interaction Models: Improving Empirical Analyses”, Political Analysis, 14 (1), pp. 63-82.

Brockhoff, S., Kieger, T., & Meierrieks, D., (2014). “Great Expectations and Hard Times - The (Nontrivial) Impact of Education on Domestic Terrorism”, Journal of Conflict Resolution: doi: 10.1177/0022002713520589.

Caulderwood, K., (2015) “Sub-Saharan Africa Falls Behind In Fight Against Extreme Poverty: World Bank Report”, International Business Times (April 14th 2015). http://www.ibtimes.com/sub-saharan-africa-falls-behind-fight-against-extreme-poverty-world-bank-report-1881460 (Accessed: 19/04/2015).

Choi, S-W., (2015). “Economic growth and terrorism: domestic, international, and suicide”, Oxford Economic Papers, 67(1), pp. 157-181.

Choi, S-W., (2010). “Fighting Terrorism through the Rule of Law?”, The Journal of Conflict Resolution, 54(6), pp. 940-966.

Choi, S-W., & Salehyan , I., (2013). “No Good Deed Goes Unpunished: Refugees, Humanitarian Aid, and Terrorism”, Conflict Management and Peace Sciences, 30(1), pp. 53-75.

Costa, A., Hermandez, M., & Sebastian-Gallés, N., (2008). “Bilingualism aids conflict resolution: Evidence from the ANT task”, Cognition, 106 (1), pp. 59-86.

De Sousa, J., Mirza, D., & Verdier, T., (2009a), “Trade and the Spillovers of Transnational Terrorism”, Swiss Society of Economics and Statistics, 145 (4), pp. 453-461.

De Sousa, J., Mirza, D., & Verdier, T., (2009b), “Terrorism Networks and Trade: Does the Neighbor Hurt?”, CEPR Discussion Paper No. DP7946.

Easterly, W., (1999. “The Ghost of Financing Gap: Testing the Growth Model Used in the International Financial Institutions”, Journal of Development Economics, 60, pp. 423-438.

Enders, W., & Sandler T., (2006). The Political Economy of Terrorism. New York: Cambridge University Press.

Enders W, Sandler T & Gaibulloev K., (2011). “Domestic versus transnational terrorism: Data, decomposition, and dynamics”. Journal of Peace Research, 48(3), pp. 319–337.

Efobi, U., Asongu, S., & Beecroft, I., (2015). “Foreign Direct Investment, Aid and Terrorism: Empirical Insight Conditioned on Corruption Control”, African Governance and Development Institute Working Paper No. 15/007, Yaoundé.

Elu, J. U., & Price, G. N., (2010). “Does China Transfer Productivity Enhancing Technology to Sub-Saharan Africa? Evidence from Manufacturing Firms”, African Development Review, 22(1), pp. 587-598.

Feridun, M., & Shahbaz, M., (2010). “Fighting Terrorism: Are Military Measures Effective? Empirical Evidence from Turkey”, Defence & Peace Economics, 21(2), pp. 193-205.

Forbes (2014). “The Latest Iron Ore Price Slump: Causes And Effects”, Forbes/Investing, http://www.forbes.com/sites/greatspeculations/2014/03/14/the-latest-iron-ore-price-slump-causes-and-effects/#fad3ef06949d (Accessed: 19/04/2016).

Gaibulloev, K., & Sandler, T., (2009). “The impact of terrorism and conflicts on growth in Asia”, Economics and Politics, 21(3), pp. 359-383.

Gailbulloev, K., Sandler, T., & Santifort, C., (2012). “Assessing the Evolving Threat of Terrorism”, Global Policy, 3(2), pp. 135-144.

Gardner, K. L., (2007). “Fighting Terrorism the FATF Way”. Global Governance: A Review of Multilateralism and International Organisation, 13(3), pp. 325-345.

Gries, T., Krieger, T., & Meierrieks, D., (2011). “Causal Linkages Between Domestic Terrorism and Economic Growth”, Defence and Peace Economics, 22(5), pp. 493-508.

Heyneman, S. P., (2002). “Defining the Influence of Education on Social Cohesion”, International Journal of Educational Policy, Research and Practice, 3(4), pp. 73-97.

Heyneman, S. P., (2008a). “Education, social cohesion and ideology. In Right to Education: Policies and Perspectives, edited by Emin Karip, 89-104. Ankara: Turkish Education Association.

Heyneman, S. P., (2008b). “Buying your way into Heaven: The corruption of education systems in global perspective.”, Perspectives on Global Issues, 2 (1), pp. 1-8.

Hoffman, A. M., Shelton, C., & Cleven, E., (2013). “Press Freedom, Publicity, and the Cross-National Incidence of Transnational Terrorism”, Political Research Quarterly, 66(4), pp. 896-909.

Humphreys, M., (2005). “Natural Resources, Conflict, and Conflict Resolution. Uncovering the Mechanisms”, Journal of Conflict Resolution, 49 (4), pp. 508-537.

International Country Risk Guide. (2010) The political risk services group, available at http://www.prsgroup.com/icrg.aspx (Accessed 10 October 2010).

Koenker, R., & Hallock, F.K., (2001), “Quantile regression”, Journal of Economic Perspectives, 15, pp.143-156.

Koh, W. T. H., (2007). “Terrorism and its impact on economic growth and technological innovation”, Technological Forecasting and Social Change, 74(2), pp. 129-138.

Le Roux, S., & Kelsey, D., (2015a). “Dragon Slaying with Ambiguity: Theory and Experiments”, Sara le Roux, Department of Economics, Oxford Brookes University.

Le Roux, S., & Kelsey, D., (2015b). “Strategic Substitutes, Complements and Ambiguity: An Experimental Study”, Department of Economics, Oxford Brookes University.

Meierrieks, D., & Gries, T., (2013). “Causality between terrorism and economic growth”, Journal of Peace Research, 50(1), pp. 91-104.

Melly, P., & Darracq, V., (2013). “A New Way to Engage? French Policy in Africa from Sarkozy to Hollande”, Catham House, Africa 2013/01, London.

Mirza, D., & Verdier, T., (2008), “International trade, security and transnational terrorism: Theory and a survey of empirics”, Journal of Comparative Economics, 36(2), pp. 179-194.

Nitsch, V., & Schumacher, D., (2004), “Terrorism and international trade: an empirical investigation”, European Journal of Political Economy, 20(2), pp. 423-433.

Öcal, N., and Yildirim, J., (2010). “Regional effects of terrorism on economic growth in Turkey: A geographically weighted regression approach”, Journal of Peace Research, 47(4), pp. 477-489.

Okada, K., & Samreth, S.,(2012), “The effect of foreign aid on corruption: A quantile regression approach”, Economic Letters, 115(2), pp. 240-243.

Oreopoulos, P., & Salvanes, K. G., (2009). “How Large are Returns to Schooling? Hint: Money Isn’t Everything.”, NBER Working Paper No. 15339.

Piazza, J. A., (2006). “Rooted in Poverty?: Terrorism, Poor Economic Development, and Social Cleavages”, Terrorism and Political Violence, 18(1), pp. 159-177.

Piazza, J. A., (2011), “The illicit drug trade, counternarcotics strategies and terrorism”, Public Choice, 149(3-4), pp. 297-314.

Piazza, J. A., (2012), “The Opium Trade and Patterns of Terrorism in the Provinces of Afghanistan: An Empirical Analysis”, Terrorism and Political Violence, 24(2), pp. 213-234.

Price, G. N., & Elu, J. U., (2016), “Global Warming And Cross-State Islamist Terrorism In Nigeria”, Department of Economics, Morehouse College, Atlanta GA.

Richardson, M., (2004), “A Time Bomb for Global Trade: Maritime-related Terrorism in an Age of Weapons of Mass Destruction”, Maritime Studies, Volume 2004 (134), pp. 1-8.

Rodrik, D., (2008). “The Real Exchange Rate and Economic Growth”, Harvard University, http://www.hks.harvard.edu/fs/drodrik/Research%20papers/RER%20and%20growth.pdf (Accessed: 29/04/2015).

Rudra, N., & Jensen, N. M., (2011). “Globalisation and the Politics of Natural Resources”, Comparative Political Studies, 44(6), pp. 639-661.

Shahbaz, M., Shahbaz, S., M., Nasir, M. M., & Edward, W. M., (2013). “An analysis of a causal relationship between economic growth and terrorism in Pakistan”, Economic Modelling, 35(September), pp. 21-29.

Shahzad, S. J. H., Zakaria, M., Rehman, M. U., Ahmed, T., & Fida, B. A., (2015) “Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis”, Social Indicators Research, (March, 2015) http://link.springer.com/article/10.1007%2Fs11205-015-0950-5

Singh, P., (2001). “Punjab Terrorism: Truth Still Uncovered”, Economic and Political Weekly, 36 (40), pp. 3829-3831.

Singh, P., (2007). “The Political Economy of the Cycles of Violence and Non-violence in the Sikh Struggle for Identity and Political Power: implications for Indian federalism”, Third World Quarterly, 28(3), pp. 555-570.

Thomas, K.W., (1992). Conflict and negotiation processes in organisations. In: Dunnette, M.D. and L.M. Hough eds. Handbook of industrial and organisational psychology. Palo Alto, CA, Consulting Psychologists Press. pp. 651–717.

Volkema, R. J., & Bergmann, T. J., (1995). “Conflict styles as indicators of behavioural patterns in interpersonal conflicts”. The Journal of Social Psychology, 135 (1), pp. 5-15.

World Bank (2015). “World Development Indicators’, World Bank Publications http://www.gopa.de/fr/news/world-bank-release-world-development-indicators-2015 (Accessed: 25/04/2015).