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Impact of Terrorism on Investment Decisions of Farmers

Listed author(s):
  • Prakarsh Singh

This article provides evidence for a particular channel through which sustained terrorism in rural areas may affect growth in developing countries. Using micro-level data from agricultural surveys during the period of insurgency in Punjab (India), I find significant negative effects of terrorism on the level of investment in long-term agricultural technology, but effects are small and insignificant for short-term investment. The presence of a major terrorist incident in a district in a year reduces long-term fixed investment by around 17 percent after controlling for district fixed-effects, time trends, district trends, and other farm-level controls. These negative effects are greater for richer farmers and those living in bordering districts. This results in a farmer losing close to 4 percent of his income annually because of the insurgency.

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File URL: http://jcr.sagepub.com/content/57/1/143.abstract
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Article provided by Peace Science Society (International) in its journal Journal of Conflict Resolution.

Volume (Year): 57 (2013)
Issue (Month): 1 (February)
Pages: 143-168

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Handle: RePEc:sae:jocore:v:57:y:2013:i:1:p:143-168
Contact details of provider: Web page: http://pss.la.psu.edu/

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