Strategic Interactions between Terrorism and FDI: A Theory-Based Model and Comparative Evidence from Egypt and Israel

Strategic Interactions between Terrorism and FDI: A Theory-Based Model and Comparative Evidence from Egypt and Israel | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Strategic Interactions between Terrorism and FDI: A Theory-Based Model and Comparative Evidence from Egypt and Israel Mahir Terzi This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8323815/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study proposes an integrated theoretical framework to explain the mutually constitutive relationship between terrorism and foreign direct investment (FDI) in conflict-affected political economies. Drawing on rational choice theory, signaling mechanisms, business-environment arguments, and strategic targeting approaches, the article demonstrates how economic flows and political violence interact through expectations, perceptions of risk, and state–market signaling. By embedding a mathematical representation of these dynamics, the study advances conceptual clarity and provides an analytical tool for examining asymmetric effects and nonlinear responses. While comparative evidence from Egypt and Israel supports the plausibility of the framework, the primary contribution lies in theorizing how states strategically mobilize economic instruments in response to sub-state violence, and how non-state actors adapt to perceived shifts in state capacity and international engagement. The findings highlight the need to reconceptualize terrorism–FDI interactions not merely as linear causal sequences, but as evolving behavioral strategies situated within broader political–economy contexts. International Relations conflict-affected political economies Egypt and Israel rational choice and strategic behavior strategic signaling terrorism– foreign direct investment nexus Full Text Additional Declarations The authors declare no competing interests. Supplementary Files SupplementalMaterial.docx Supplemental Material Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8323815","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":558036195,"identity":"b9274855-59fc-429e-af97-8403370c005d","order_by":0,"name":"Mahir Terzi","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA10lEQVRIiWNgGAWjYFACHoYDYJqZ+QADYwPRWhJAWtgSiNfCANbCwGNAnBbd9rMHD1f+sMmXb+f5JvFzh40cA/vhoxvwaTE7k5dw8ExCmmVjM+82yd4zacYMPGlpN/BqOZBjcLAh4bABMzPvNgnetsOJDRI8Zvi1nH8D0vLfgI2Z55nkX6K03ADbcsCAh5mHTZo4W26AbElLNpBgZjO2lm1LM2Yj6JfzOcYfG2zsDOT7Dz+8+bbNRo6f/fAxvFqQAYsEiGQjVjkIMH8gRfUoGAWjYBSMHAAA6OxJMpydwOkAAAAASUVORK5CYII=","orcid":"https://orcid.org/0000-0003-1308-2060","institution":"Ministry of Culture and Tourism of Türkiye Republic","correspondingAuthor":true,"prefix":"","firstName":"Mahir","middleName":"","lastName":"Terzi","suffix":""}],"badges":[],"createdAt":"2025-12-10 06:38:54","currentVersionCode":1,"declarations":{"humanSubjects":false,"vertebrateSubjects":false,"conflictsOfInterestStatement":false,"humanSubjectEthicalGuidelines":false,"humanSubjectConsent":false,"humanSubjectClinicalTrial":false,"humanSubjectCaseReport":false,"vertebrateSubjectEthicalGuidelines":false},"doi":"10.21203/rs.3.rs-8323815/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8323815/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":98323286,"identity":"fcae0c1e-d0a9-4e4e-8d7e-3e4786465ba5","added_by":"auto","created_at":"2025-12-16 14:15:23","extension":"docx","order_by":0,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1231472,"visible":true,"origin":"","legend":"","description":"","filename":"Preprint.docx","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/725a9e440e205d2ef7a84ab6.docx"},{"id":98438080,"identity":"64b79660-2a43-4fdc-9c2f-9e4c232b67b3","added_by":"auto","created_at":"2025-12-17 16:58:37","extension":"json","order_by":1,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":342,"visible":true,"origin":"","legend":"","description":"","filename":"rs8323815.json","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/97d06729a5a18de9f2243f00.json"},{"id":98438359,"identity":"224ee7b8-f60a-469b-b0aa-6bd8071c2e35","added_by":"auto","created_at":"2025-12-17 16:59:06","extension":"xml","order_by":2,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":212029,"visible":true,"origin":"","legend":"","description":"","filename":"rs83238150enriched.xml","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/763c7ed30201b52fe9b77a89.xml"},{"id":98323288,"identity":"e5b4e184-7705-4ac7-94db-3a6938f76f5a","added_by":"auto","created_at":"2025-12-16 14:15:23","extension":"emf","order_by":7,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":102776,"visible":true,"origin":"","legend":"","description":"","filename":"floatimage1.emf","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/a0e84ae024582b46b31728af.emf"},{"id":98438110,"identity":"8829b68c-1f85-4524-b911-3bef7154594d","added_by":"auto","created_at":"2025-12-17 16:58:40","extension":"png","order_by":8,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":5958,"visible":true,"origin":"","legend":"","description":"","filename":"Onlinefloatimage1.png","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/32ca5ddaa760a71b23ee505c.png"},{"id":98323289,"identity":"be06bce6-c74d-4795-b7ac-1ecc215b7922","added_by":"auto","created_at":"2025-12-16 14:15:23","extension":"xml","order_by":9,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":210026,"visible":true,"origin":"","legend":"","description":"","filename":"rs83238150structuring.xml","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/a8362c81bf0ee05b1e09d5d0.xml"},{"id":98436685,"identity":"4eadf213-8cee-4602-bc6b-85260fd2e927","added_by":"auto","created_at":"2025-12-17 16:56:03","extension":"html","order_by":10,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":218050,"visible":true,"origin":"","legend":"","description":"","filename":"earlyproof.html","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/0ef80b8cf5b60159a27a3473.html"},{"id":98445549,"identity":"c911259e-d4ad-4c6e-876e-64cc94f0dd3d","added_by":"auto","created_at":"2025-12-17 17:19:59","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":839405,"visible":true,"origin":"","legend":"","description":"","filename":"Preprint.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1_covered_50c0a72b-2a95-4ea5-aab4-32e69e8dc297.pdf"},{"id":98323284,"identity":"5309e2db-da39-4359-802a-9417f43cfaaa","added_by":"auto","created_at":"2025-12-16 14:15:23","extension":"docx","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":72131,"visible":true,"origin":"","legend":"\u003cp\u003eSupplemental Material\u003c/p\u003e","description":"","filename":"SupplementalMaterial.docx","url":"https://assets-eu.researchsquare.com/files/rs-8323815/v1/623c297a219544b8954d3feb.docx"}],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003e\u003cstrong\u003eStrategic Interactions between Terrorism and FDI: A Theory-Based Model and Comparative Evidence from Egypt and Israel\u003c/strong\u003e\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"conflict-affected political economies, Egypt and Israel, rational choice and strategic behavior, strategic signaling, terrorism– foreign direct investment nexus","lastPublishedDoi":"10.21203/rs.3.rs-8323815/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8323815/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study proposes an integrated theoretical framework to explain the mutually constitutive relationship between terrorism and foreign direct investment (FDI) in conflict-affected political economies. Drawing on rational choice theory, signaling mechanisms, business-environment arguments, and strategic targeting approaches, the article demonstrates how economic flows and political violence interact through expectations, perceptions of risk, and state\u0026ndash;market signaling. By embedding a mathematical representation of these dynamics, the study advances conceptual clarity and provides an analytical tool for examining asymmetric effects and nonlinear responses. While comparative evidence from Egypt and Israel supports the plausibility of the framework, the primary contribution lies in theorizing how states strategically mobilize economic instruments in response to sub-state violence, and how non-state actors adapt to perceived shifts in state capacity and international engagement. The findings highlight the need to reconceptualize terrorism\u0026ndash;FDI interactions not merely as linear causal sequences, but as evolving behavioral strategies situated within broader political\u0026ndash;economy contexts.\u003c/p\u003e","manuscriptTitle":"Strategic Interactions between Terrorism and FDI: A Theory-Based Model and Comparative Evidence from Egypt and Israel","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-12-16 14:15:18","doi":"10.21203/rs.3.rs-8323815/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"d5694543-909e-442b-8986-39584f41f7e7","owner":[],"postedDate":"December 16th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":59397677,"name":"International Relations"}],"tags":[],"updatedAt":"2025-12-16T14:15:18+00:00","versionOfRecord":[],"versionCreatedAt":"2025-12-16 14:15:18","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8323815","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8323815","identity":"rs-8323815","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}