Do foreign direct investment and trade affect the relationship between temperature and civil conflict?
Do foreign direct investment and trade affect the relationship between temperature and civil conflict?
This study investigates the role of countries’ outward orientation in the relationship between temperature and civil conflict. We add to existing literature by highlighting the importance of FDI and trade openness as mitigating factors to reduce the risk of temperature-induced conflict. Using data from 62 developing countries covering the period 1990–2022, and incorporating several estimation methods and robustness tests, our results indicate that higher temperature increases conflict risk, while FDI inflows, particularly non-primary sector FDI, and trade openness, weaken the positive association by virtue of technical innovation and their capacity to stimulate sustainable practices and climate adaptation strategies. Hence, greater trade with developing countries, along with higher foreign investment into their secondary and tertiary sectors, alleviates their trade-off between extreme temperatures and civil conflict. This broader understanding of the macroeconomic factors moderating the temperature-conflict relationship offers another valuable perspective for inter-governmental climate policy-making efforts to reduce civil conflict.
Civil conflict, Economic sectors, Foreign direct investment, Temperature, Trade openness
Li, Chengchun
0ee7a126-be5b-4b56-81f4-5dc2d5b2b1c0
Tanna, Sailesh
4dd83d1e-e298-44e1-a99e-11b21672c285
De Vita, Glauco
002fc6bf-e5ed-4a13-8993-0ce5e1fc2005
Yang, Keyi
3df6b9a3-51ae-43ac-bc1d-a890fa4b2c98
Luo, Yun
2ac0f228-573d-43e7-b309-1529b6f3d174
Chen, Yan
ab683f71-5ca5-4151-826a-cc94ef30cd5f
11 September 2025
Li, Chengchun
0ee7a126-be5b-4b56-81f4-5dc2d5b2b1c0
Tanna, Sailesh
4dd83d1e-e298-44e1-a99e-11b21672c285
De Vita, Glauco
002fc6bf-e5ed-4a13-8993-0ce5e1fc2005
Yang, Keyi
3df6b9a3-51ae-43ac-bc1d-a890fa4b2c98
Luo, Yun
2ac0f228-573d-43e7-b309-1529b6f3d174
Chen, Yan
ab683f71-5ca5-4151-826a-cc94ef30cd5f
Li, Chengchun, Tanna, Sailesh, De Vita, Glauco, Yang, Keyi, Luo, Yun and Chen, Yan
(2025)
Do foreign direct investment and trade affect the relationship between temperature and civil conflict?
Economic Modelling, 152, [107293].
(doi:10.1016/j.econmod.2025.107293).
Abstract
This study investigates the role of countries’ outward orientation in the relationship between temperature and civil conflict. We add to existing literature by highlighting the importance of FDI and trade openness as mitigating factors to reduce the risk of temperature-induced conflict. Using data from 62 developing countries covering the period 1990–2022, and incorporating several estimation methods and robustness tests, our results indicate that higher temperature increases conflict risk, while FDI inflows, particularly non-primary sector FDI, and trade openness, weaken the positive association by virtue of technical innovation and their capacity to stimulate sustainable practices and climate adaptation strategies. Hence, greater trade with developing countries, along with higher foreign investment into their secondary and tertiary sectors, alleviates their trade-off between extreme temperatures and civil conflict. This broader understanding of the macroeconomic factors moderating the temperature-conflict relationship offers another valuable perspective for inter-governmental climate policy-making efforts to reduce civil conflict.
Text
FINAL temperature conflict paper accepted by Economic Modelling 29 August 2025
- Accepted Manuscript
Restricted to Repository staff only until 11 September 2028.
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Accepted/In Press date: 29 August 2025
e-pub ahead of print date: 3 September 2025
Published date: 11 September 2025
Keywords:
Civil conflict, Economic sectors, Foreign direct investment, Temperature, Trade openness
Identifiers
Local EPrints ID: 506071
URI: http://eprints.soton.ac.uk/id/eprint/506071
ISSN: 0264-9993
PURE UUID: ded0083a-7e6d-409d-a912-589639c52b31
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Date deposited: 28 Oct 2025 17:43
Last modified: 01 Nov 2025 02:56
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Contributors
Author:
Chengchun Li
Author:
Sailesh Tanna
Author:
Glauco De Vita
Author:
Keyi Yang
Author:
Yan Chen
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