Making Do with What You Have: Conflict, Firm Performance and Input Misallocation in Palestine
This paper investigates the effect of conflict on firms' output value and input misallocation in the context of Palestine during the Second Intifada. Using a unique establishment-level dataset, we compare firms' outcomes and input usage over time across districts experiencing differential changes in conflict intensity. We show how conflict diminishes the total and per-worker value of firms' output through the distortions it generates in firms' access to input markets. In particular, lack of access to the market for imported material inputs leads firms to adjust input usage accordingly, substituting domestically produced materials for imported ones. We also empirically identify the relative amount of conflict-induced input distortions. Furthermore, we find that conflict affects dis-proportionally more those sectors which were more intensive in imported materials and had higher average output value in pre-conflict years. Conflict is thus shown to be particularly harmful for the most productive sectors of the economy.
|Date of creation:|
|Contact details of provider:|| Postal: Via Conservatorio 7 - 20122 Milano|
Phone: +39 02 503 16486
Fax: +39 02 503 16475
Web page: http://www.dagliano.unimi.it/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mary Amiti & Jozef Konings, 2007.
"Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia,"
American Economic Review,
American Economic Association, vol. 97(5), pages 1611-1638, December.
- Mary Amiti & Jozef G Konings, 2005. "Trade Liberalization, Intermediate Inputs, and Productivity; Evidence from Indonesia," IMF Working Papers 05/146, International Monetary Fund.
- Amiti, Mary & Konings, Jozef, 2005. "Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia," CEPR Discussion Papers 5104, C.E.P.R. Discussion Papers.
- Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
- Richard Rogerson & Diego Restuccia, 2004. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," 2004 Meeting Papers 69, Society for Economic Dynamics.
- Diego Restuccia & Richard Rogerson, 2007. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Working Papers tecipa-283, University of Toronto, Department of Economics.
- Diego Restuccia & Richard Rogerson, 2007. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," NBER Working Papers 13018, National Bureau of Economic Research, Inc.
- Paul Collier & V. L. Elliott & Håvard Hegre & Anke Hoeffler & Marta Reynal-Querol & Nicholas Sambanis, 2003. "Breaking the Conflict Trap : Civil War and Development Policy," World Bank Publications, The World Bank, number 13938, December.
- Nabil Aranki, Ted, 2004. "The Effect of Israeli Closure Policy on Wage Earnings in the West Bank and Gaza Strip," Working Papers 2004:4, Örebro University, School of Business.
- Kasahara, Hiroyuki & Lapham, Beverly, 2013. "Productivity and the decision to import and export: Theory and evidence," Journal of International Economics, Elsevier, vol. 89(2), pages 297-316.
- Hiroyuki Kasahara & Beverly Lapham, 2008. "Productivity and the Decision to Import and Export: Theory and Evidence," CESifo Working Paper Series 2240, CESifo Group Munich.
- Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
- Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
- Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
- Ksoll, Christopher & Macchiavello, Rocco & Morjaria, Ameet, 2010. "The Effect of Ethnic Violence on an Export-Oriented Industry," CEPR Discussion Papers 8074, C.E.P.R. Discussion Papers.
- Christopher Ksoll & Rocco Macchiavello & Ameet Morjaria, 2010. "The Effect of Ethnic Violence on an Export- Oriented Industry," CID Working Papers 48, Center for International Development at Harvard University.
- Di Maio, Michele & Nandi, Tushar K., 2013. "The effect of the Israeli–Palestinian conflict on child labor and school attendance in the West Bank," Journal of Development Economics, Elsevier, vol. 100(1), pages 107-116.
- 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.
- Paul Collier & Marguerite Duponchel, 2013. "The Economic Legacy of Civil War," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(1), pages 65-88, February.
- Massimiliano Calì & Sami H. Miaari, 2012. "The labour market impact of mobility restrictions: Evidence from the West Bank," HiCN Working Papers 130, Households in Conflict Network.
- Cali, Massimiliano & Miaari, Sami H., 2013. "The labor market impact of mobility restrictions : evidence from the West Bank," Policy Research Working Paper Series 6457, The World Bank.
- Massimiliano Cali & Sami Miaari, 2013. "The labour market impact of mobility restrictions: Evidence from the West Bank," ERSA conference papers ersa13p99, European Regional Science Association.
- Singh, Prakarsh, 2011. "Impact of terrorism on investment decisions of farmers: evidence from the Punjab insurgency," MPRA Paper 33328, University Library of Munich, Germany.
- 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.
- Camacho, Andriana & Rodriguez, Catherine, 2010. "Firm Exit and Armed Conflict in Colombia," WIDER Working Paper Series 094, World Institute for Development Economic Research (UNU-WIDER).
- Sami Miaari & Robert Sauer, 2011. "The labor market costs of conflict: closures, foreign workers, and Palestinian employment and earnings," Review of Economics of the Household, Springer, vol. 9(1), pages 129-148, March.
- Miaari, Sami H. & Sauer, Robert M., 2006. "The Labor Market Costs of Conflict: Closures, Foreign Workers, and Palestinian Employment and Earnings," IZA Discussion Papers 2282, Institute for the Study of Labor (IZA).
- Asaf Zussman & Noam Zussman & Morten Orregaard Nielsen, 2008. "Asset Market Perspectives on the Israeli-Palestinian Conflict," Economica, London School of Economics and Political Science, vol. 75(297), pages 84-115, February.
- Kasahara, Hiroyuki & Rodrigue, Joel, 2008. "Does the use of imported intermediates increase productivity? Plant-level evidence," Journal of Development Economics, Elsevier, vol. 87(1), pages 106-118, August.
- Joel Rodrigue & Hiroyuki Kasahara, 2004. "Does the Use of Imported Intermediates Increase Productivity? Plant-Level Evidence," Econometric Society 2004 North American Summer Meetings 511, Econometric Society.
- Hiroyuki Kasahara & Joel Rodrigue, 2005. "Does the Use of Imported Intermediates Increase Productivity? Plant-Level Evidence," University of Western Ontario, Economic Policy Research Institute Working Papers 20057, University of Western Ontario, Economic Policy Research Institute.
- Efraim Benmelech & Claude Berrebi & Esteban Klor, 2010. "Counter-Suicide-Terrorism: Evidence from House Demolitions," NBER Working Papers 16493, National Bureau of Economic Research, Inc.
- Mansour, Hani, 2010. "The effects of labor supply shocks on labor market outcomes: Evidence from the Israeli-Palestinian conflict," Labour Economics, Elsevier, vol. 17(6), pages 930-939, December.
- Hani Mansour, 2010. "The Effects of Labor Supply Shocks on Labor Market Outcomes: Evidence from the Israeli-Palestinian Conflict," Discussion Papers of DIW Berlin 1014, DIW Berlin, German Institute for Economic Research.
- Awad Mataria & Rita Giacaman & Angelo Stefanini & Nirmala Naidoo & Paul Kowal & Somnath Chatterji, 2009. "The quality of life of Palestinians living in chronic conflict: assessment and determinants," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(1), pages 93-101, February.
- Mansour, Hani & Rees, Daniel I., 2012. "Armed conflict and birth weight: Evidence from the al-Aqsa Intifada," Journal of Development Economics, Elsevier, vol. 99(1), pages 190-199. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:csl:devewp:379. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chiara Elli)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.