Abstract
Foreign direct investment has been a driving force for economic growth in many countries around the world due to its many additional effects. Therefore, many countries around the world actively seek to attract foreign direct investment. Since the early 1990s, many studies have suggested that terrorism can have a negative impact on foreign direct investment (Kang and Lee, 2007; Shahzad et al., 2016; Shah and Faiz, 2015; Li and Vashchilko, 2010; Suliman and Mollick, 2009 et al.). However, although many studies have been conducted, the data on terrorism are from the early 2000s, and the number of research subjects is limited. This study empirically analyzed the effect of terrorism on foreign direct investment. Analysis shows that terrorism has a negative impact on foreign direct investment. In other words, as the number of victims of terrorism and the number of deaths from terrorism per number of terrorist attacks increased, the inflow of foreign investment was found to decrease. This suggests the need for a country to develop a policy to prevent terrorism and a means or policy to resolve disputes in order to attract foreign direct investment, which can become a driving force for economic growth.
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