Zusammenfassung:
This study uncovers a powerful, yet overlooked geographic dimension to terrorism's macroeconomic impact. Our findings reveal that terror's harm to FDI is profoundly shaped by attack location. Using Pakistan as a case study we show that assaults on economic and political centers cause far greater damage to FDI than attacks in peripheral areas. From 2001-2021, terrorism cost Pakistan $8.1 billion in lost FDI, eroding nearly 30% of its foreign capital stock. These results carry broad relevance, highlighting how localized violence can generate systemic, uneven macroeconomic consequences, which supports geographically calibrated policy responses to terror.
