Impacts of Terrorism on Economic Growth and Foreign Direct Investment in Developing Asian Countries: Malaysia, Indonesia and Philippines

Terrorism is one of the most serious, damaging, and disturbing problems nowadays. Terrorism attacks are intended to apply sufficient pressure on a government so that it grants political and economic concessions. This study aims to investigate the impacts of terrorism on economic growth (GDP) and foreign direct investment (FDI) in Developing Asian Countries: Malaysia, Indonesia, and Philippines. The panel data was collected from World Bank Data Malaysia and the Department of Statistics Malaysia from 1999 to 2016 for each selected country. This study uses the panel data regressions to analyze the data by using the Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Random Effect (RE). This study showed that gross domestic product and foreign direct investment have a negative relationship with terrorism in Malaysia, Indonesia, and Philippines. The overall research or findings of this study can guide the government to identify the ways to prevent or manage to sustain terrorist attacks without displaying economic growth and foreign direct investment consequences