October 16, 2013
This paper is the first global investigation of the relationship between remittances and terrorism. To discern this relationship, we draw terrorism event data from the Global Terrorism Database and International Terrorism: Attributes of Terrorism Events. When a host of standard terrorism controls is employed, lagged remittances as a share of gross domestic product have a positive and significant impact on both domestic and transnational terrorist attacks. For the venue country’s viewpoint, lagged remittances have a greater marginal impact on domestic than on transnational terrorism. However, when we investigate remittances to the home country of the perpetrator, lagged remittances have the greatest marginal impact on transnational terrorism. Throughout our investigation, standard terrorism controls perform according to our priors and those of the literature, lending credence to the isolation of the impact of remittances. We also account for endogeneity concerns.