Differentiating Terrorism and Sanctioned Finance: Regiment Stability and Economic Hierarchy

This Research Note delves into the intricate dynamics of how socio-spatial embeddedness contributes to the emergence of sanctioned firms and terrorist attacks. Leveraging datasets such as the Global Terrorism Database, the Terror Finance Database, the Social Fragility Matrix, and Polity IV, our study analyses the relationship between socio-spatial embeddedness within the regime stability. Our investigation reveals that countries experiencing more terrorist attacks tend to manifest fewer characteristics of national socio-spatial embeddedness. Specifically, they exhibit a lack of political regime stability, a higher likelihood of illiberal governance, and increased harmful stratification among social groups. Conversely, we find that sanctioned firms flourish in countries where government regimes are more stable and inclusive. Countries with a higher incidence of terrorist attacks demonstrate fewer traits associated with social cohesion and stability. In contrast, firms financing terrorist operations are more likely to be situated in countries  characterised by stability and higher levels of social cohesion. Our findings align with the economic world-system paradigm, illustrating that sanctioned financial firms are more prevalent in core countries and less prevalent in the periphery.