International Journal of Economics and Financial Issues ISSN: 2146-4138 available at http: www.econjournals.com International Journal of Economics and Financial Issues, 2020, 10(5), 387-393. International Journal of Economics and Financial Issues | Vol 10 • Issue 5 • 2020 387 Terrorism and International Tourism Nexus: Evidence from Pakistan Abdur Rauf 1 , Hafz Muhammad Abubakar Siddique 2 , Qasim Saleem 3 , Sidra 4 1 Department of Economics, Abbottabad University of Science and Technology, Pakistan, 2 Department of Business and Commerce, GIFT University Gujranwala, Pakistan, 3 GIFT Business School, GIFT University Gujranwala, Pakistan, 4 Schools Education Department, Government of Punjab, Pakistan. *Email: qami2006@yahoo.com Received: 02 August 2020 Accepted: 18 September 2020 DOI: https://doi.org/10.32479/ijef.10674 ABSTRACT The association among terrorism and tourism is crucial from the macroeconomic perspective as tourism is considered as a vital sector regarding developmental impacts. This analysis conducted to extract the infuence of terrorism on tourism in Pakistan, expending the latest dataset and incorporating some additional factors like FDI, human capital, and economic growth for 1980-2016, using ARDL bounds test. The evidence shows that terrorism has an inverse relationship with tourism in the long run that is statistically signifcant. Economic growth, FDI, and human capital are the increasing factors of tourism. Terrorism may cause to create insecurity and devastating recreational places. There is a need to resolve the issue of terrorism to enhance tourism in Pakistan. It may help tourist authorities to understand the nature of the impact of terrorism on the tourism industry in Pakistan. Keywords: Terrorism, Tourism, ARDL, Human Capital, Economic Growth JEL Classifcations: L83, Z32, J24, F43 1. INTRODUCTION The tourism industry has a signifcant contribution to economic development. It helps the people to advance their living standards, and it gives a chance to a nation to improve its repute over the world. Tourism is confronting various issues that deteriorate its contribution to economic development. Moreover, due to numerous issues, including political unrest and terrorism, individuals are not ready to make visits on the risk of security. Many factors are affecting the survival and growth of the tourism industry, for example, economic growth, FDI, human capital, terrorism, and many others. Economic growth afects tourism through diferent channels, including the development of infrastructure, facilitating tourism through increased individual’s earnings, enabling them to spend more on leisure, relaxation, and tourism progress. Human capital is considered as an essential asset, contributing primarily to support and sustain tourism. Foreign direct investment (FDI) in tourism (including diferent developmental construction projects of hotels and resorts, recreational facilities, and infrastructure development at the city and regional level) contributes to the economic well-being and the development of tourism industry itself. Terrorism can cause ripple efects through diferent channels in the economy, generating negative impacts regarding economic development, loss of infrastructure and lives, and causing uncertainty in the market. According to the global terrorism database, five countries have the highest number of deaths from terrorism, which are Iraq, Afghanistan, Syria, Nigeria, and Pakistan. International tourism is the primary factor for many large and small economies in the world, which depends to a large extent on tourism income like a lively reservoir of foreign exchange earnings. Security and peace are the main determinants to attract This Journal is licensed under a Creative Commons Attribution 4.0 International License