Do natural resources invite terrorism: evidence from resource-rich region

PurposeThe MENA region is very rich in terms of natural resources. At the same time, the MENA region has also been a victim of terrorism during the last few years. This study is an attempt to investigate whether there is any relationship between natural resources and terrorism in the MENA region.Design/methodology/approachWe have focused on 15 resource-rich countries located in the MENA region for the period 2002-2019. We have applied appropriate econometric techniques and have also controlled for other dominant determinants of terrorism while studying the relationship between these two variables.FindingsThe results provide solid evidence in favor of the hypothesis that natural resources encourage terrorism. We find that natural resources have positively impacted terrorism. Besides, the natural resources, other factors such as per capita GDP, trade openness, political stability, domestic investment and government expenditures have negatively impacted terrorism. Moreover, the findings suggest that FDI and corruption are irrelevant in explaining terrorism while the findings regarding employment level and terrorism are unexpected. The obtained results are robust to alternative estimating methodologies.Practical implicationsThe results have serious policy implications for the MENA region. The MENA region in general is suggested to devise appropriate policies regarding their huge natural resources so as to tackle the terrorism problem effectively. Similarly, paying favorable attention to trade liberalization, political stability, government expenditures, investment, rising income of the population in the presence of macroeconomic stability in the form of lower inflation would also help the MENA region to eradicate the problem of terrorism.Originality/valueThe available literature has largely ignored the role of natural resources in explaining the problem of terrorism. Therefore, this study has provided relatively new evidence regarding the determinants of terrorism.