TERRORIST ATTACKS AND CORPORATE INVESTMENT IN INDONESIA

Authors

Dat Thanh Nguyen, The University of Danang, VietnamFollow
Dinh Hoang Bach Phan, La Trobe University, AustraliaFollow
Van Ky Long Nguyen, The University of Danang, VietnamFollow

Document Type

Article

Abstract

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.

Recommended Citation

Nguyen, Dat Thanh; Phan, Dinh Hoang Bach; and Nguyen, Van Ky Long (2021) "TERRORIST ATTACKS AND CORPORATE INVESTMENT IN INDONESIA," Bulletin of Monetary Economics and Banking: Vol. 24: No. 1, Article 5.
DOI: https://doi.org/10.21098/bemp.v24i1.1283
Available at: https://bulletin.bmeb-bi.org/bmeb/vol24/iss1/5

First Page

53

Last Page

70

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Vietnam

Affiliation

The University of Danang