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Firm Exit and Armed Conflict in Colombia

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  • Adriana Camacho
  • Catherine Rodriguez

Abstract

This article uses two unique panel data sets to study the causal effect that armed conflict has over firm exit in Colombia. Using a fixed-effect estimation methodology at the plant level and controlling for the possible endogeneity of armed conflict through the use of instrumental variables, we find that a one-standard deviation ( SD ) increase in the number of guerrilla and paramilitary attacks in a municipality increases the probability of plant exit in 5.5 percentage points or .28 SD . This effect is stronger for younger manufacturing plants, with a smaller number of workers and low levels of capital.

Suggested Citation

  • Adriana Camacho & Catherine Rodriguez, 2013. "Firm Exit and Armed Conflict in Colombia," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(1), pages 89-116, February.
    • Handle: RePEc:sae:jocore:v:57:y:2013:i:1:p:89-116
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