Does Terrorism have a Limited Impact on International Investments in Tourism? Some Theoretical Considerations

Abstract

Foreign direct investment (FDI) in tourism is a catalyst for a number of positive changes within the economy of the host country and reflect positively on economic growth. Therefore, it is in the interest of many countries to attract foreign investors, which is especially prevalent in developing countries. At the same time, the 21st century is marked by major changes in terms of safety, influencing the appearance of the contemporary international terrorism. Terrorism has many direct and indirect effects and is influenced by mass media, reflects on changes in behaviour patterns of modern tourists, including the movement of tourist flows as well as flows of FDI into tourism. Tourism, FDI and security are three very interrelated concepts. The purpose of this paper is to explore to what extent uncertainty, primarily in the form of terrorism, affects FDI in tourism. It should also be borne in mind that the picture of the risky countries in the conditions of global uncertainty changes very rapidly and in such circumstances each destination may potentially become risky. Existing research on terrorism and foreign direct investment in tourism are scarce and give different results.