Global After-Effects of 9/11

Discussion Q&As

Did the events of 9/11/2001 change the global landscape for business?

The international arena of business has suffered tremendously as a result of past terrorist acts, in particular 9/11.

In developed countries such as the United States and England, a number of negative effects on business have surfaced during the long run stage after an attack. Industries that have been affected include airline companies and insurance companies. The governments of these nations and their policies have also been affected by terrorism.

During the aftermath of the 9-11 attack, scores of businesses and personal property owners made insurance claims.

Between $30 and $58 billion dollars were lost due to insurance and reinsurance claims. Furthermore, it is believed that this was the largest amount ever lost. To respond to these huge losses, insurance companies have made a number of adjustments. Premiums offered by most of these companies have increased by approximately 30%. Higher insurance rates have an adverse effect on the business revenue and capital available for investments. In addition to this, some of these insurance companies have also stopped offering insurance claims for terrorist attacks.

Source: A FAILED "TRANSITION": THE MOUNTING COSTS OF THE IRAQ WAR, A Study by the Institute for Policy Studies and Foreign Policy In Focus Ports Authority Annual Report and Accounts 1999-2003.

When is it appropriate to use foreign R&D?

When examining the determinants of R&D with a special focus on the role of competition, it is concluded that a high degree of persistence in R&D and little evidence of any, negative or positive, effect of competition on R&D. Moreover, there is no indication of a spillover effect of FDI on R&D in domestic firms. Finally, firms with high R&D intensities tend to have a relatively skilled labor force, are relatively small in size, and State Owned Enterprises are more R&D intensive than are domestic and foreign private firms.

On the other hand, we look at the effects of market-access concessions for domestic and foreign firms and for domestic consumers. It also argued that the relative benefits of cross-border and establishment-related market-access concessions