Low-intensity Conflict and Firm Level Investment in Ethiopia
AbstractThis paper investigates the effect of low-intensity armed conflict on firm-level investment in a Sub-Saharan African country. We match firm level panel data from Ethiopian manufacturing with battle events at the town level. Using a more precise spatial identification of conflict exposure, we find that conflict reduces the investment rate significantly even when events are not extremely violent. The adverse investment effect increases with the geographic proximity of conflict and tends to decline with the capital intensity of production.
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Bibliographic InfoPaper provided by Department of Economics, College of William and Mary in its series Working Papers with number 141.
Length: 40 pages
Date of creation: 25 Jul 2013
Date of revision: 05 Dec 2013
Armed conflict; investment; firms; Ethiopia; GIS data;
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-05 (All new papers)
- NEP-DEV-2013-08-05 (Development)
- NEP-GEO-2013-08-05 (Economic Geography)
- NEP-TRE-2013-08-05 (Transport Economics)
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- Lance Kent & Toan Phan, 2013. "Business Cycles with Revolutions," Working Papers 145, Department of Economics, College of William and Mary.
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