Firm Growth in Conflict Countries: Some Evidence from South Asia

Review of Economics & Finance, 3(2), 2013

12 Pages Posted: 1 Feb 2014

See all articles by Klaus Friesenbichler

Klaus Friesenbichler

Austrian Institute of Economic Research

Date Written: April 1, 2013

Abstract

This paper provides robust evidence on feedback effects of violent conflicts on firm growth. It uses South Asian firm level data that contain rare employment information on countries that experience severe conflicts. We show that firm growth exists in conflict areas. Yet, there are fewer expanding firms. They tend to grow slower than firms in other countries in the region, and firms that shed staff decline faster. Particularly firms in urban conflict areas were performing less dynamically. The results point at severe investment climate issues in conflict countries, which imply a lower degree of industrial and productivity dynamics in afflicted regions.

Keywords: Firm growth, Employment, Conflict, Urban, South Asia, Afghanistan, Pakistan

JEL Classification: D00, D92, L11, N95

Suggested Citation

Friesenbichler, Klaus, Firm Growth in Conflict Countries: Some Evidence from South Asia (April 1, 2013). Review of Economics & Finance, 3(2), 2013, Available at SSRN: https://ssrn.com/abstract=2388837

Klaus Friesenbichler (Contact Author)

Austrian Institute of Economic Research ( email )

P.O. Box 91
Wien, A-1103
Austria

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