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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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    1. Eslava, Marcela & Haltiwanger, John & Kugler, Adriana & Kugler, Maurice, 2004. "The effects of structural reforms on productivity and profitability enhancing reallocation: evidence from Colombia," Journal of Development Economics, Elsevier, vol. 75(2), pages 333-371, December.
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    1. repec:ebd:wpaper:152 is not listed on IDEAS
    2. repec:eee:jeeman:v:89:y:2018:i:c:p:46-70 is not listed on IDEAS
    3. Hönig, Tillman, 2017. "The Impact of Peace: Evidence from Nigeria," MPRA Paper 83302, University Library of Munich, Germany.
    4. Juan F. Vargas & Luis Fernando Gamboa & Viviana García, 2015. "El lado oscuro de la equidad: violencia y equidad en el desempeño escolar," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, December.
    5. repec:col:000385:015970 is not listed on IDEAS
    6. Alvaro J. Riascos & Juan F. Vargas, 2011. "Violence and growth in Colombia: A review of the quantitative literature," Economics of Peace and Security Journal, EPS Publishing, vol. 6(2), pages 15-20, July.
    7. Brück, Tilman & Naudé, Wim & Verwimp, Philip, 2013. "Entrepreneurship and Violent Conflict in Developing Countries," WIDER Working Paper Series 028, World Institute for Development Economic Research (UNU-WIDER).
    8. Klapper, Leora & Richmond, Christine & Tran, Trang, 2013. "Civil conflict and firm performance : evidence from Cote d'Ivoire," Policy Research Working Paper Series 6640, The World Bank.
    9. Sameeksah Desai & Zoltán J. Ács & Utz Weitzel, 2015. "A Model of Destructive Entrepreneurship: Insight for Conflict and Postconflict Recovery," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 1, pages 3-23 Edward Elgar Publishing.
    10. Francesco Amodio & Michele Di Maio, "undated". "Making Do with What You Have: Conflict, Firm Performance and Input Misallocation in Palestine," Development Working Papers 379, Centro Studi Luca d'Agliano, University of Milano.
    11. Lemus Natalia, 2014. "Conflict-Induced Poverty: Evidence from Colombia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(1), pages 113-142, January.
    12. Martínez, Luis R., 2017. "Transnational insurgents: Evidence from Colombia's FARC at the border with Chávez's Venezuela," Journal of Development Economics, Elsevier, vol. 126(C), pages 138-153.

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    Keywords

    conflict; firm exit; entrepreneurship; Colombia;

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