Abstract:
Terrorism has been maintained for the last five decades in fluctuating frequency in
Turkey. In this process, thousands of people have been killed or wounded in over
4.000 terrorist attacks. However, the intangible economic costs and damages of them
were ignored partially. Accordingly, this study investigates the intangible economic
aspects of the terrorist attacks in terms of foreign direct investments over the 1988-
2018 period towards Turkey as a developing country. The findings of the
Autoregressive Distributed Lag (ARDL) Bounds Test, which is designed by the
results of Zivot-Andres Unit Root Test allowing a break in time series, indicate that
there is not a statistically significant relationship between terrorist attacks and
foreign direct investments both in the short-run and long-run at the national level.
The low share of terrorist attacks targeting business and investments as well as the
low frequency, severity and geographically concentration degree of them could be
potential reasons for these findings. However, potentially destructive impacts of
terrorist attacks, which are frequently observed in the southeast of Turkey, should
not be ignorable.
