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Firm Growth in Conflict Countries: Some Evidence from South Asia

Author

Listed:
  • Klaus Friesenbichler

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

Abstract

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.

Suggested Citation

  • Klaus Friesenbichler, 2013. "Firm Growth in Conflict Countries: Some Evidence from South Asia," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 33-44, May.
  • Handle: RePEc:bap:journl:130203
    as

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    File URL: http://www.bapress.ca/ref/v3-2/1923-7529-2013-02-33-12.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Zoltán J. Ács & Pamela Mueller, 2015. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 16, pages 304-319 Edward Elgar Publishing.
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    4. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
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    6. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, May.
    7. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 24 Edward Elgar Publishing.
    8. 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.
    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.
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    11. Haltiwanger, John, 2011. "Firm dynamics and productivity growth," EIB Papers 5/2011, European Investment Bank, Economics Department.
    12. Collier, Paul & Hoeffler, Anke, 2007. "Civil War," Handbook of Defense Economics, Elsevier.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Firm growth; Employment; Conflict; Urban; South Asia; Afghanistan; Pakistan;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

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