This paper studies the impact of terrorism on the number of tourist arrivals through an unbalance data set using OLS estimation with fixed effects. The study is carried out on 167 countries for the period 1995 to 2014. The results suggest that the number of terrorist attacks have a significant negative effect on tourism. We also quantify the spillover effect from the regions directly affected by a terrorist attack to other non-affected regions located within and outside of the affected region.

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... inally, our findings also suggest that, in countries where terrorist attacks are observed, there exists a particular level of military expenditure as a proportion of GDP above which tourism statistics tend to increase.