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The Effect of Ethnic Violence on an Export-Oriented Industry

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  • Ksoll, Christopher
  • Macchiavello, Rocco
  • Morjaria, Ameet

Abstract

This paper investigates the effects of ethnic violence on export-oriented firms and their workers. Following the disputed 2007 Kenyan presidential election, export volumes of flower firms affected by the ensuing violence dropped by 38 percent and worker absence exceeded 50 percent. Large firms and firms with stable contractual relationships in export markets registered smaller proportional losses and had fewer workers absent. Model calibrations indicate that, to induce workers to come and work over-time, operating costs, on average, increased by 16 percent. For the marginal worker, the cost of going to work exceeded the average weekly income by 320 percent.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8074.

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Date of creation: Oct 2010
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Handle: RePEc:cpr:ceprdp:8074

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Related research

Keywords: ethnic Violence; exports; firm heterogeneity; non-traditional agriculture;

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References

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  1. Massimo Guidolin & Eliana La Ferrara, 2007. "Diamonds Are Forever, Wars Are Not: Is Conflict Bad for Private Firms?," American Economic Review, American Economic Association, vol. 97(5), pages 1978-1993, December.
  2. Akresh, Richard & de Walque, Damien, 2008. "Armed conflict and schooling : evidence from the 1994 Rwandan genocide," Policy Research Working Paper Series 4606, The World Bank.
  3. Timothy Besley & Hannes Mueller, 2009. "Estimating the Peace Dividend:The Impact of Violence on HousePrices in Northern Ireland," STICERD - Economic Organisation and Public Policy Discussion Papers Series 011, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. Alberto Alesina & Sule Ozler & Nouriel Roubini & Phillip Swagel, 1992. "Political Instability and Economic Growth," NBER Working Papers 4173, National Bureau of Economic Research, Inc.
  5. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  6. Dupas, Pascaline & Robinson, Jonathan, 2012. "The (hidden) costs of political instability: Evidence from Kenya's 2007 election crisis," Journal of Development Economics, Elsevier, vol. 99(2), pages 314-329.
  7. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
  8. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Civil Wars and International Trade," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 541-550, 04-05.
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Citations

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Cited by:
  1. Muhammad, Andrew & D’Souza, Anna & Amponsah, William, 2013. "Violence, Instability, and Trade: Evidence from Kenya’s Cut Flower Sector," World Development, Elsevier, vol. 51(C), pages 20-31.
  2. Muhammad, Andrew & D'Souza, Anna & Amponsah, William A., 2011. "Violence, Political Instability, and International Trade: Evidence from Kenya’s Cut Flower Sector," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 118374, Agricultural and Applied Economics Association.
  3. Jonas Hjort, 2013. "Ethnic Divisions and Production in Firms," CESifo Working Paper Series 4449, CESifo Group Munich.
  4. Macchiavello, Rocco & Morjaria, Ameet, 2013. "The Value of Relationships: Evidence from a Supply Shock to Kenyan Rose Exports," CEPR Discussion Papers 9531, C.E.P.R. Discussion Papers.
  5. 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.
  6. Cali, Massimiliano & Miaari, Sami H., 2013. "The labor market impact of mobility restrictions : evidence from the West Bank," Policy Research Working Paper Series 6457, The World Bank.
  7. 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.

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