Decomposing the asymmetric effects of terrorism and FDI on carbon emission: evidence from fragile economies

Terrorism is a universal phenomenon that creates economic, political, social, and environmental problems. The literature infers that little consideration is delivered to the nexus of terrorism and pollution emissions. To the best of the authors' knowledge, this study is a pioneer that investigates the linear/symmetric and non-linear/asymmetric impacts of foreign direct investment and terrorism on the CO2 emissions for ten fragile economies. For the empirical task, the study collected data for time 1973 to 2019 and employed ARDL and NARDL approaches. The findings demonstrate an asymmetric association between foreign direct investment (FDI), terrorism, and CO2 emissions. The findings infer that positive changes in FDI and terrorism have a significant positive impact on CO2 emissions. However, the negative changes in FDI and terrorism significantly impact CO2 emissions in most economies. Furthermore, the NARDL approach delivers more explanatory and powerful estimates for selected countries in contrast to the ARDL approach. On the basis of these findings, the study delivers some appropriate policies to combat terrorism.