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Firm Exit and Armed Conflict in Colombia

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  • Adriana Camacho

    ()
    (Department of Economics, Universidad de Los Andes, Bogotá, Colombia)

  • Catherine Rodriguez

    (Department of Economics, Universidad de Los Andes, Bogotá, Colombia)

Abstract

This article uses two unique panel data sets to study the causal effect that armed conflict has over firm exit in Colombia. Using a fixed-effect estimation methodology at the plant level and controlling for the possible endogeneity of armed conflict through the use of instrumental variables, we find that a one-standard deviation (SD) increase in the number of guerrilla and paramilitary attacks in a municipality increases the probability of plant exit in 5.5 percentage points or .28 SD. This effect is stronger for younger manufacturing plants, with a smaller number of workers and low levels of capital.

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Bibliographic Info

Article provided by Peace Science Society (International) in its journal Journal of Conflict Resolution.

Volume (Year): 57 (2013)
Issue (Month): 1 (February)
Pages: 89-116

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Handle: RePEc:sae:jocore:v:57:y:2013:i:1:p:89-116

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Web page: http://pss.la.psu.edu/

Related research

Keywords: conflict; firm exit; entrepreneurship; Colombia;

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References

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  1. Alvaro J. Riascos & Juan F. Vargas, 2011. "Violence and growth in colombia: a review of the quantitative literature," DOCUMENTOS DE TRABAJO 008806, UNIVERSIDAD DEL ROSARIO.
  2. Eslava, Marcela & Haltiwanger Jr, John C & Kugler, Adriana D. & Kugler, Maurice, 2004. "The Effects of Structural Reforms on Productivity- and Profitability-Enhancing Reallocation: Evidence from Colombia," CEPR Discussion Papers 4569, C.E.P.R. Discussion Papers.
  3. Murat Iyigun & Dani Rodrik, 2004. "On the Efficacy of Reforms: Policy Tinkering, Institutional Change, and Entrepreneurship," NBER Working Papers 10455, National Bureau of Economic Research, Inc.
  4. Daniel Mejía & Carlos Esteban Posada, 2003. "Capital Destruction, Optimal Defense and Economic Growth," BORRADORES DE ECONOMIA 002096, BANCO DE LA REPÚBLICA.
  5. Olga Shemyakina, 2006. "The Effect of Armed Conflict on Accumulation of Schooling: Results from Tajikistan," HiCN Working Papers 12, Households in Conflict Network.
  6. Alvarez, Roberto & Görg, Holger, 2005. "Multinationals and Plant Exit: Evidence from Chile," IZA Discussion Papers 1611, Institute for the Study of Labor (IZA).
  7. Philip Verwimp & Tom Bundervoet, 2008. "Consumption Growth, Household Splits and Civil War," Research Working Papers 9, MICROCON - A Micro Level Analysis of Violent Conflict.
  8. Joshua D. Angrist & Adriana Kugler, 2005. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," NBER Working Papers 11219, National Bureau of Economic Research, Inc.
  9. Adriana Camacho, 2008. "Stress and Birth Weight: Evidence from Terrorist Attacks," American Economic Review, American Economic Association, vol. 98(2), pages 511-15, May.
  10. Catherine rodríguez & fabio s�nchez, 2012. "Armed Conflict Exposure, Human Capital Investments, And Child Labor: Evidence From Colombia," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(2), pages 161-184, April.
  11. Alejandro Gaviria, 2002. "Assessing the Effects of Corruption and Crime on Firm Performance: Evidence from Latin America," INVESTIGACIÓN ECONÓMICA EN COLOMBIA 001902, FUNDACIÓN PONDO.
  12. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  13. Rony Pshisva & Gustavo A. Suarez, 2006. "'Captive markets': the impact of kidnappings on corporate investment in Colombia," Finance and Economics Discussion Series 2006-18, Board of Governors of the Federal Reserve System (U.S.).
  14. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
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Citations

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Cited by:
  1. Juan Fernando Vargas & Luis Fernando Gamboa & Viviana Garcia, 2014. "El lado oscuro de la equidad: Violencia y equidad en el desempeño escolar," DOCUMENTOS DE TRABAJO 011190, UNIVERSIDAD DEL ROSARIO.
  2. Alvaro J. Riascos & Juan F. Vargas, 2011. "Violence and growth in colombia: a review of the quantitative literature," DOCUMENTOS DE TRABAJO 008806, UNIVERSIDAD DEL ROSARIO.
  3. Bruck, Tilman & Naude, Wim & Verwimp, Philip, 2013. "Entrepreneurship and violent conflict in developing countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Klapper, Leora & Richmond, Christine & Tran, Trang, 2013. "Civil conflict and firm performance : evidence from Cote d'Ivoire," Policy Research Working Paper Series 6640, The World Bank.
  5. Carly Petracco & Helena Schweiger, 2012. "The impact of armed conflict on firms’ performance and perceptions," Working Papers 152, European Bank for Reconstruction and Development, Office of the Chief Economist.
  6. Lemus Natalia, 2014. "Conflict-Induced Poverty: Evidence from Colombia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(1), pages 113-142, January.

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