TERRORIST ATTACKS AND CORPORATE INVESTMENT IN INDONESIA | Zendy

Dat Thanh Nguyen | Zendy; Dinh Hoang Bach Phan | Zendy; Van Ky Long Nguyen | Zendy

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TERRORIST ATTACKS AND CORPORATE INVESTMENT IN INDONESIA

Author(s) -

Dat Thanh Nguyen,

Dinh Hoang Bach Phan,

Van Ky Long Nguyen

Publication year - 2021

Publication title -

deleted journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.505

H-Index - 4

ISSN - 2460-9196

DOI - 10.21098/bemp.v24i1.1283

Subject(s) - terrorism , investment (military) , robustness (evolution) , capital investment , business , monetary economics , economics , econometrics , finance , political science , biochemistry , chemistry , politics , law , gene

Using yearly data from 1997 to 2017, this paper studies the effect of terrorism (number of attacks) on corporate investment in Indonesia. Applying an investment-type model, we show that firms reduce their capital expenditure due to an increase in the number of terrorist attacks. On average, a one standard deviation increase in the number of terrorist attacks reduces corporate investment by 9.23%. We also find heterogenous reactions of firms to terrorism across different sectors and different panels based on firm characteristics. Finally, our main results remain consistent after performing several robustness tests.

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