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Firm Growth in Conflict Countries: Some Evidence from South Asia

  • Klaus Friesenbichler

    ()

    (Austrian Institute of Economic Research (WIFO), Austria)

This paper provides robust evidence on feedback effects of violent conflicts on firm growth. It uses South Asian firm level data that contain rare employment information on countries that experience severe conflicts. We show that firm growth exists in conflict areas. Yet, there are fewer expanding firms. They tend to grow slower than firms in other countries in the region, and firms that shed staff decline faster. Particularly firms in urban conflict areas were performing less dynamically. The results point at severe investment climate issues in conflict countries, which imply a lower degree of industrial and productivity dynamics in afflicted regions.

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File URL: http://www.bapress.ca/ref/v3-2/1923-7529-2013-02-33-12.pdf
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Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

Volume (Year): 3 (2013)
Issue (Month): (May)
Pages: 33-44

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Handle: RePEc:bap:journl:130203
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  1. David E. Bloom & David Canning & Larry Rosenberg, 2011. "Demographic Change and Economic Growth in South Asia," PGDA Working Papers 6711, Program on the Global Demography of Aging.
  2. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters, in: Handbook on the Economics and Theory of the Firm, chapter 24 Edward Elgar.
  3. Zoltan Acs & Pamela Mueller, 2008. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Small Business Economics, Springer, vol. 30(1), pages 85-100, January.
  4. Edward Glaeser, 1997. "Learning in Cities," NBER Working Papers 6271, National Bureau of Economic Research, Inc.
  5. Kosuke Imai & Jeremy M. Weinstein, 2000. "Measuring the Economic Impact of Civil War," CID Working Papers 51, Center for International Development at Harvard University.
  6. Haltiwanger, John, 2011. "Firm dynamics and productivity growth," EIB Papers 5/2011, European Investment Bank, Economics Department.
  7. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
  8. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  9. Alex Coad & Werner Hölzl, 2009. "On the Autocorrelation of Growth Rates," Journal of Industry, Competition and Trade, Springer, vol. 9(2), pages 139-166, June.
  10. Friesenbichler, Klaus, 2011. "Employment growth patterns in South Asia : some evidence from interim enterprise survey data," Policy Research Working Paper Series 5856, The World Bank.
  11. Collier, Paul & Hoeffler, Anke, 2007. "Civil War," Handbook of Defense Economics, Elsevier.
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