What is the impact of terrorism on trade through higher security at the borders? The authors set up a theory which shows that the impact goes not only from terrorism to trade. Higher trade with a partner might, in turn, increase the probability of terrorism acts and make security measures more...

The authors offer a general analytical framework illustrating the complex two-way interactions between trade and transnational terrorism. Then they survey the recent economic literature in light of this framework by pointing to the importance in empirical studies of (1) controlling appropriately...