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Impact of terrorism on investment decisions of farmers: evidence from the Punjab insurgency

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  • Singh, Prakarsh

Abstract

This paper 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% 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% of his income annually because of the insurgency.

Suggested Citation

  • Singh, Prakarsh, 2011. "Impact of terrorism on investment decisions of farmers: evidence from the Punjab insurgency," MPRA Paper 33328, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33328
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    Citations

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    Cited by:

    1. Sutanuka Roy & Prakarsh Singh, 2016. "Gender bias in education during conflict: Evidence from Assam," WIDER Working Paper Series wp-2016-67, World Institute for Development Economic Research (UNU-WIDER).
    2. Galdo Virgilio & Acevedo Gladys Lopez & Rama Martin, 2021. "Conflict and the composition of economic activity in Afghanistan," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-23, January.
    3. Bernal, Carolina & Prem, Mounu & Vargas, Juan F. & Ortiz, Mónica, 2024. "Peaceful entry: Entrepreneurship dynamics during Colombia’s peace agreement," Journal of Development Economics, Elsevier, vol. 166(C).
    4. Roy, Sutanuka & Singh, Prakarsh, 2016. "Gender Bias in Education during Conflict: Evidence from Assam," IZA Discussion Papers 10092, Institute of Labor Economics (IZA).
    5. Adelaja, Adesoji, 2016. "Agriculture, Inclusive Growth and National Stability:," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235909, Agricultural and Applied Economics Association.
    6. 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.
    7. Ceren Baysan & Marshall Burke & Felipe González & Solomon Hsiang & Edward Miguel, 2018. "Economic and Non-Economic Factors in Violence: Evidence from Organized Crime, Suicides and Climate in Mexico," NBER Working Papers 24897, National Bureau of Economic Research, Inc.
    8. James M. Lutz, 2017. "Risk Sensitivity and the Sikh Uprising in the Punjab," India Quarterly: A Journal of International Affairs, , vol. 73(3), pages 327-341, September.
    9. Ciarli, Tommaso & Kofol, Chiara & Menon, Carlo, 2015. "Business as unusual. An explanation of the increase of private economic activity in high-conflict areas in Afghanistan," LSE Research Online Documents on Economics 65015, London School of Economics and Political Science, LSE Library.
    10. Tilman Brück & Wim Naudé & Philip Verwimp, 2013. "Entrepreneurship and Violent Conflict in Developing Countries," WIDER Working Paper Series wp-2013-028, World Institute for Development Economic Research (UNU-WIDER).
    11. Tony Addison & Rachel Gisselquist & Miguel Niño-Zarazúa & Saurabh Singhal, 2015. "Needs vs Expediency - Poverty Reduction and Social Development in Post-Conflict Countries," Working Papers id:7371, eSocialSciences.
    12. Laurent WAGNER, 2020. "The allocation of resources of national development banks," Working Paper 9c3d4298-95e5-4561-a9cb-5, Agence française de développement.
    13. Tony Addison & Rachel M. Gisselquist & Miguel Niño-Zarazúa & Saurabh Singhal, 2015. "Needs versus Expediency: Poverty Reduction and Social Development in Post-conflict Countries," WIDER Working Paper Series wp-2015-063, World Institute for Development Economic Research (UNU-WIDER).
    14. 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).
    15. Tony Addison & Rachel Gisselquist & Miguel Niño-Zarazúa & Saurabh Singhal, 2015. "Needs vs Expediency - Poverty Reduction and Social Development in Post-Conflict Countries," Working Papers id:7371, eSocialSciences.
    16. Prakarsh Singh & Sutanuka Roy, 2016. "Gender Bias in Education During Conflict Evidence from Assam," NCID Working Papers 09/2016, Navarra Center for International Development, University of Navarra.

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    More about this item

    Keywords

    Terrorism; Rural Conflict; Violence; Investment; Agriculture; Farmers; Punjab;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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