The links between renewable energy, fossil energy, terrorism, economic growth and trade openness: the case of Pakistan

Terror as well as terrorism could result in substantial levels of losses for any economy. This paper empirically examines the impact of terrorism on trade openness, renewable, fossil energy, and economic growth in the case of Pakistan over the period 1990–2017. We use the autoregressive distributive lag (ARDL), bound testing model, to explore the short and long-run relationship among trade openness, renewable energy, economic growth, fossil energy, and terrorism. The error correction model (ECM) reveals the short-run relationship between trade openness, economic growth, renewable and fossil energy, and terrorism. In general, we find economic growth on domestic terrorism is strong. We also find the terrorist activities decrease the trade volume. The findings suggest that terrorism has a negative influence on Pakistan’s economic growth and trade. Pakistan needs to make strict policies in terms of the utilization of more renewable energies, while, in the meantime, to resolve military and political differences with the help of its diplomatic channels specifically in the country and particularly in South Asia.