Impact of Terrorism on Cross-Border Mergers and Acquisitions (M&amp;As): Prevalence, Frequency and Intensity

Ouyang, Alice Y.; Rajan, Ramkishen S.

doi:10.1007/s11079-016-9407-y

Cited by 12 publications

(10 citation statements)

References 41 publications

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“…25 showed that terrorism may cause low economic growth. Quyang and Rajan 26 found terrorism have an influence on the FDI inflows and they determined that the intensity and frequency have a bigger effect when the terrorist attacks are compared. Blomberg and Mody, 27 Muckley, 28 Filer and Stanišić, 29 Bildirici and Gökmenoglu 30 are the other papers that determine the presence of the negative effects of terrorist attacks on FDI inflow and economic growth.…”

Section: The Nexus Between Economic Growth Fdi Inflow and Terrorist Attacksmentioning

confidence: 99%

Terrorism, environmental pollution, foreign direct investment (FDI), energy consumption, and economic growth: Evidences from China, India, Israel, and Turkey

Bildirici

2020

Energy & Environment

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In this paper, it was aimed to investigate the relation between economic growth, terrorism, foreign direct investment (FDI) inflow, environmental pollution, and energy consumption in China, India, Israel, and Turkey for a time span of 43 years from 1975 to 2017. Three different panel cointegration methods to determine the cointegration relation and two different causality methods to find the direction of causality were simultaneously used, since the presence of cointegration and direction of causality are fundamental to design economic policy and strategy. After similar results from panel cointegration tests were obtained, the causality tests were applied. Panel causality tests determined the evidence of uni-directional causality from terrorism, FDI, and energy usage to CO2 emission.

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Section: The Nexus Between Economic Growth Fdi Inflow and Terrorist Attacksmentioning

confidence: 99%

Terrorism, environmental pollution, foreign direct investment (FDI), energy consumption, and economic growth: Evidences from China, India, Israel, and Turkey

Bildirici

2020

Energy & Environment

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“…Ref. [37] argues that terrorist incidents do not affect mergers and acquisitions (M&A), while the intensity and frequency of terrorist attacks negatively affect M&A. Interestingly, ref. [38] indicates that more terrorism led to more FDI in some of the regions and for the developing world as a whole.…”

Section: State-of-the-art: Relationship Between Terrorism and Fdimentioning

confidence: 99%

Terrorism as a Determinant of Attracting FDI in Tourism: Panel Analysis

Radić

2018

Sustainability

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The aim of this paper is to investigate whether terrorism is one of the important determinants affecting the investment decisions of foreign investors in tourism on a panel of 50 countries over the period 2000 to 2016. In addition to terrorism, the importance of three other theoretically significant determinants of attracting foreign direct investment (FDI) in tourism are explored—the previous level of FDI in tourism, the level of GDP and the international tourist arrivals. To obtain more reliable research results, the initial model is extended with certain control variables. The study uses system-GMM estimator for dynamic panel data models. The research results of a narrower and a wider model indicate that terrorism has no significant effect on the FDI inflow in tourism while international tourist arrivals significantly affect the future FDI in tourism in both models. Furthermore, the research results entail certain political connotations. In order to attract foreign investors in tourism, the most important factor is to ensure a stable macroeconomic environment with a competitive position in the Doing Business list and what better business conditions. Attention should also be focused on the security and preventive counter-terrorism, which will ensure that potential destinations reflect confidence, have a growth rate of tourist arrivals and, consequently, attract foreign investors.

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“…The coefficient of interest here is b, which measures the association of terrorist activities with (log) merger and acquisition value decisions. The setup of this model is similar in spirit to Witte et al (2017) and Ouyang & Rajan (2017), though we measure outcomes at the level of the investing firm, rather than the origin country.…”

Section: Empirical Strategymentioning

confidence: 99%

“…We scale the number of attacks to the population of the country (from the WDI world governance indicators). The literature is divided over this choice (Ouyang & Rajan, 2017; Bandyopadhyay, Sandler & Younas, 2014; Powers & Choi, 2012). Our prior is that the attacks per capita better reflect the probability of being affected by an attack for a given firm – a single attack may have comparatively lower impact in Nigeria than in Burundi.…”

Section: Empirical Strategymentioning

confidence: 99%

“…Terrorist attacks may correlate to other characteristics of the host country, which could also explain investment behavior. We include a set of controls to rule out confounding explanations conventional to the literature (Di Giovanni, 2005; Ouyang & Rajan, 2017; Powers & Choi, 2012; Wang, 2008). To control for the level of development that might confound with terrorist activity, we include GDP and GDP per capita measures of the host.…”

Section: Empirical Strategymentioning

confidence: 99%

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The impact of terrorism on international mergers and acquisitions: Evidence from firm-level decisions

Hogetoorn

Gerritse

2020

Journal of Peace Research

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Does terrorism inhibit a country’s ability to attract international direct investment? If so, terrorism may have large costs in terms of employment losses, macroeconomic instability, and missed development opportunities. However, do investors fear terrorism because of direct risks to their assets, or because the opportunities in the host country deteriorate? And how do they adjust investments? We study the impact of terrorism on merger and acquisition decisions of 8,872 firms over 116 countries over 16 years. The firm-level perspective allows the isolation of host-country terrorism from firm-level characteristics such as size or experience as an explanation, by comparing decisions for the same firm across destinations. It also allows separation of investment responses into reductions or entire withholding of investment. A sample standard deviation increase in terrorism reduces merger and acquisition investment by around 30%. Firms do not generally reduce the size of their investment in the face of terrorism – instead, they decide not to enter the country altogether. We find no evidence to suggest that multinational firms are more sensitive to attacks on local business assets. A country-level analysis, which necessarily does not control for firm-level characteristics, yields materially different conclusions.

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Impact of Terrorism on Cross-Border Mergers and Acquisitions (M&As): Prevalence, Frequency and Intensity

Cited by 12 publications

References 41 publications

Terrorism, environmental pollution, foreign direct investment (FDI), energy consumption, and economic growth: Evidences from China, India, Israel, and Turkey

Terrorism, environmental pollution, foreign direct investment (FDI), energy consumption, and economic growth: Evidences from China, India, Israel, and Turkey

Terrorism as a Determinant of Attracting FDI in Tourism: Panel Analysis

The impact of terrorism on international mergers and acquisitions: Evidence from firm-level decisions

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