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ISSN: 2168-9601
Journal of Accounting & Marketing
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Effect of Terrorism on the International Business in Pakistan

Rabia Najaf*

Riphah International University, Islamabad, Pakistan

*Corresponding Author:
Rabia Najaf
Riphah International University, Islamabad, Pakistan
Tel: +92 51 111 510 510
E-mail: [email protected]

Received Date: November 22, 2016; Accepted Date: December 14, 2016; Published Date: January 02, 2017

Citation: Najaf R (2017) Effect of Terrorism on the International Business in Pakistan. J Account Mark 6: 210. doi:10.4172/2168-9601.1000210

Copyright: © 2017 Najaf R. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

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Abstract

In this paper, we have explored the impact of terrorism on the international business in Pakistan. For this purpose we have taken the data from 1998 to 2008 and applied the random sampling method and Pearsons product moment. Our results are showing that there is association between terrorism and international business in Pakistan. Terrorism has impact not only stock exchange of Pakistan while, it has impact on the other sectors like education, banking sector, finance sectors, foreign direct investment sectors also. Therefore Government of Pakistan should have taken notice such types of terrorism activities. These terrorism activities have impact on the economy of country; due to this reason the economy of Pakistan is going to decline position.

Keywords

Terrorism; International business; Random sampling method; Pearson’s product moment

Introduction

In simple words, Terrorism is known as the way to make the people of all over world frighten. Terrorists are those people, who are reason of the terrorism. Nowadays, it is the common problem of across the world. In the current senserio, Pakistan has come in those countries, which are facing this issue at very high level. Day by day the ratio of terrorism is increasing at very huge level such as the boom blast, target killing are daily routine. Many Terrorist are killing no of innocent people in the name of religion. All the people in Pakistan are getting fed up due to this terrorism activities. In our country, not a single person is safe. Pakistan is one of those countries, which were established on the name of Islam but due to terrorism most of the innocent people are killing here. Our current Government cannot protect the lives of innocent people. Karachi and Baluchistan have come at the top due to terrorism activates. Our all the securities agencies, police, army and rangers could not control such types of horrible attacks. This is the main reason that foreign investors have left investing in Pakistan. Pakistan is not doing any international trade with other countries. The prime objective of this paper is to analysis the impact of terrorism on the international business in Pakistan. Hence, it is not wrong saying that terrorism has very worst impact on the development of the economy. Terrorism is such a phenomena that running polices are not being properly viewed and new policies are not being organized. People of Pakistan are moving towards decaling position because terrorism has influenced on the education sector, foreign direct investment and international business. People of Pakistan want to live peaceful but from many years, they are facing horrible condition. In Pakistan terrorism has seen at the peak. Most of the studies have proved that terrorism means human impose disaster. According to William Terrorism means systematic threat towards development of the economy. Due to terrorism actives all the international business faces the loss. Here, there is interesting question to ask that impact of terrorism on the internal and external sector of all the developing and emerging countries. Most of the scholars have proved that direct effect have on the business consequences and indirect effect has on the government rules and regulations. Numerous results have proved that terrorism effects on the high profit ratio business. From the last few years the terrorism attack effect the progress of Pakistan. Our paper is trying to show that terrorism impact on the progress as well as economic condition of Pakistan. The economic position of Pakistan is totally going to destroy due to terrorism attacks.

Terrorism Activities in Israel

Fatalities from Terrorism in Israel by year, 1948-2014 is shown in Figure 1.

accounting-marketing-relationship-terrorism

Figure 1: Fatalities from Terrorism in Israel by year, 1948-2014.

Objectives

1) Impact of terrorism on the development of the economy.

2) Impact of terrorism on the international business in Pakistan.

3) Impact of terrorism on the industry sector of Pakistan.

Problem statement

Impact of terrorism on the international business in Pakistan

Theoretical framework

Theoretical framework is shown in Figure 2.

accounting-marketing-relationship-framework

Figure 2: Theoretical framework.

Literature Review

Aurangzeb and Dilawer observed that impact of terrorism on the stock market of Nigeria, for this purpose, they had taken the data from 1998 to 2008 and applied the GARCH model; their results are showing that there is negative association between terrorism and performance of Nigeria stock exchange. They suggested that there is need of adequate polices to control such types of activities [1].

Alam, analyzed that impact of terrorism on the stock market of India, for this purpose, they had taken the data from 1995 to 2005 and applied the VAR model; their results are showing that there is negative association between terrorism and performance of India stock exchange. They suggested that there is need of adequate polices to control such types of activities [2].

Chesney et al. examined that impact of terrorism on the stock market of USA, for this purpose, they had taken the data from 1991 to 2001 and applied the OLS model; their results are showing that there is negative association between terrorism and performance of USA stock exchange. They suggested that there is need of adequate polices to control such types of activities [3].

Kumar and Liu analyzed that impact of terrorism on the stock market of UK, for this purpose, they had taken the data from 1999 to 2010 and applied the GARCH model; their results are showing that there is negative association between terrorism and performance of UK stock exchange. They suggested that there is need of adequate polices to control such types of activities [4].

Khan and Ahmed observed that impact of terrorism on the stock market of France, for this purpose, they had taken the data from 1990 to 2010 and applied the VAR model; their results are showing that there is negative association between terrorism and performance of France stock exchange. They suggested that there is need of adequate polices to control such types of activities [5].

Nguyen and Enomoto observed that impact of terrorism on the stock market of Nigeria, for this purpose, they had taken the data from 1998 to 2008 and applied the model; their results are showing that there is negative association between terrorism and performance of Nigeria stock exchange. They suggested that there is need of adequate polices to control such types of activities [6].

Qaiser et al. examined that impact of terrorism on the stock market of Ghana, for this purpose, they had taken the data from 1997 to 2007 and applied the multiregression equation; their results are showing that there is negative association between terrorism and performance of Ghana stock exchange. They suggested that there is need of adequate polices to control such types of activities [7].

Suleman analyzed that impact of terrorism on the stock market of Pakistan, for this purpose, they had taken the data from 1997 to 2007 and applied the linear regression equation; their results are showing that there is negative association between terrorism and performance of Pakistan stock exchange. They suggested that there is need of adequate polices to control such types of activities [8].

Berrebi and Klor viewed that impact of terrorism on the stock market of Tanzania, for this purpose, they had taken the data from 1989 to 2008 and applied the ECM; their results are showing that there is negative association between terrorism and performance of Tanzania stock exchange. They suggested that there is need of adequate polices to control such types of activities [9].

Bollerslver observed that impact of terrorism on the stock market of Saudi Arabia, for this purpose, they had taken the data from 1989 to 2008 and applied the ECM; their results are showing that there is negative association between terrorism and performance of Saudi Arabia stock exchange. They suggested that there is need of adequate polices to control such types of activities [10].

Rabia najaf and Khakannajaf examined that impact of terrorism on the stock market of Asian countries, for this purpose, they had taken the data from 1989 to 2008 and applied the VECM; their results are showing that there is negative association between terrorism and performance of Asian countries stock exchange. They suggested that there is need of adequate polices to control such types of activities [11-13].

Methodology

Interpretation of the results

In this paper, we have utilized both primary and secondary data, for the purpose of primary data, we did face to face interview of different businessmen of Pakistan. We have utilized the 3 liker scale. There are found the overall reliability 0.83%. In this paper, we utilized parametric analysis. Our results are showing that there in negative association between BOP and terrorism. The value of F-cal is showing that there is negative association between terrorism and foreign investors’. Our results are also showing that there is very worst impact on the financial market (Tables 1-7).

Model R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson
1 0.458 0.212 0.105 0.38623 0.114
aPredictors: (Constant), Terrorism. Dependent Variable: BOP & TERR.          

Table 1: Regression table.

  Type Sum of Squares df Mean Square F Sig.
Regression 32.232 2 38.212 48.674 0.000a  
1 Residual 81.825 101 0.726    
Total 121.056 101        

Table 2: Regression table.

  Sum of Squares df Mean Square F Sig.
Between Groups 12.997 2 9.298 10.253 0
Within Groups 132.367 128 0.258    
Total 122.365        

Table 3: Regression table.

Model R R Square Adjusted Rsquare Std. Error of theEstimate R Square change F change df1 df2 Sig. Fchange Durbin-Watson
1 0.129a 0.18 0.173 2.14924 0.181 41.258 2 104 0 0.231

Table 4: Regression table.

Model R R Square Adjusted R square Std. Error of the estimate Durbin-watson
1 0.171a 0.1566 0.128 0.28606 0.525
aPredictors: (Constant), Terro.          

Table 5: Regression table.

  Sum of Squares Df Mean Square F Sig.
Between Groups 33.885 2 19.941 25.741 0
Within Groups 81.881 103 0.771    
Total 121.762 101      

Table 6: Regression table.

Model TypeStd. Error Standardized Coefficients (Beta) T Sig.
1
(Constant) 1.232 0.197
Terro 0.287 0.168
- 5.166 0
0.271 7.109 0

Table 7: Regression table.

Suggestions

Government should focus on the terrorism sector because:

1) Terrorism is effecting on the capital market development.

2) Terrorism is main reason of financial crisis.

3) Terrorism has influenced on the education as well as industries sector.

Recommendations

1) In Pakistan, there is basic need to improve the human capital.

2) There is need of peaceful environment for the foreign investors.

3) There is need of make strict rules against the terrorism activities.

References

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