Terrorist events and foreign direct investment: outcomes unveiled by robust statistical models in the example of Greece

Abstract

This study examines whether the terrorist attacks impact foreign direct investments to Greece, with as much up-to-date data as possible. In this framework, hypotheses are tested within the framework of relational models through the data between 1970 and 2020. The results show a medium correlation between terrorist attacks and foreign direct investment, which is statistically significant. There is also a slightly higher correlation between terrorist attacks and foreign direct investment as a parameter of gross domestic product, which is statistically significant. Moreover, as the robust regression analysis shows, there is a bidirectional causal relationship between the variables. However, with complete data, there appears to be a causality tendency between variables by increasing foreign direct investment in the short term. At the same time, the results reveal causality from foreign direct investment to terrorist attacks.