This paper analyzes the relationship between terrorism and natural resources in Chad over the period 1996-2019. To achieve this objective, we rely on a two-step cointegration strategy suited to a sample of 23 annual observations: the unrestricted error-correction model derived from the ARDL bounds-testing approach (Pesaran, Shin, & Smith, 2001) to estimate the long-run relationship between natural resources and terrorism, and Toda and Yamamoto (1995) augmented Granger causality test, which is robust to the order of integration of the series, to determine the direction of causality between the two variables; Johansen (1988) cointegration test is used as a robustness check. The results confirm a cointegrating relationship between terrorism and natural resources. However, the Granger causality test does not reveal any significant direct causality between natural resources and terrorism in either direction; the long-run relationship between the two variables appears to operate mainly through indirect channels, namely GDP per capita and gross fixed capital formation.
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