Terrorism and investment in Africa: Exploring the role of military expenditure

The aim of this study is to investigate the inuflence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes xfied eefcts regression with Driscoll and Kraay standard error and cushions the eefct of simultaneity and reverse causality us ing the lags of the regressors as instruments. eTh empirical results reveal the negative eefct of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net eefct of military expenditure on the relation ship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to osfet the negative eefct of terrorism on FDI. eTh study recommends that counterterrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance.