Social and Behavioral Sciences Commons^™

Terrorism Hazard And Infrastructure Projects: The Moderating Role Of Home Experience And Institutions, Alfredo Jiménez, Nathaniel C. Lupton

Faculty Research, Scholarly, and Creative Activity

This paper analyzes the impact of terrorism hazard on the performance of private participation infrastructure projects. Applying transaction cost theory, we hypothesize that terrorism hazard has a negative relationship with infrastructure project completion, and that host government accountability and investor experience with terrorism hazard have opposing impacts on this relationship. Host government accountability, we argue, produces higher indirect costs of managing terrorism hazard, which reduces investor confidence, and reinforces the negative relationship between terrorism hazard and the probability of satisfactory project completion. Conversely, investor’s experience with terrorism hazard increases investor confidence and hence partially mitigates the negative consequences of terrorism …