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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Ludwig, Sandra / Schmitz, Hendrik

Ed. by Auriol, Emmanuelle / Barigozzi, Francesca / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / de Vries, Frans / Wenzel, Tobias / Zulehner, Christine


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Volume 19, Issue 1

Issues

Volume 19 (2019)

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Terrorism and Firm Performance: Empirical Evidence from Pakistan

Ummad MazharORCID iD: https://orcid.org/0000-0003-0784-6757
Published Online: 2018-12-15 | DOI: https://doi.org/10.1515/bejeap-2018-0041

Abstract

A secure business environment for private enterprises is desired by all states and is endorsed as a part of United Nation’s sustainable development goals. However, the risk exposure of private enterprises against terrorism, particularly in developing countries, is not adequately studied. Using Enterprise Surveys (ES) data for more than 2000 firms located across the four provinces of Pakistan, this paper studies the link between the risk of terrorism and firm performance. It finds, after controlling for various firm specific performance determinants as well as provincial and sector specific heterogeneities, that terrorism has a significant negative effect on firms’ performance which is independent of firm size. This effect is robust against different specifications and estimation methods including instrumental variables strategy. Beyond much explored aggregate consequences, terrorism has direct consequences for production processes at micro level.

Keywords: terrorism; business enterprises; firms; employment growth; Pakistan

JEL Classification: L10; L20; O10; O40; D74

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About the article

Published Online: 2018-12-15


This work was supported by Lahore University of Management Sciences, Funder Id: 10.13039/100010139, Grant Number: Faculty initiative fund


Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 19, Issue 1, 20180041, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/bejeap-2018-0041.

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