Civil Conflict and Firm Performance : Evidence from Cote d'Ivoire
This paper investigates the impact of political instability and civil conflict on firms. It studies the unrest in Cote d'Ivoire that began in 2000, using a census of all registered firms for the years 1998-2003. The analysis uses structural es...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/10/18347991/civil-conflict-firm-performance-evidence-cote-divoire http://hdl.handle.net/10986/16857 |
| Summary: | This paper investigates the impact of
political instability and civil conflict on firms. It
studies the unrest in Cote d'Ivoire that began in 2000,
using a census of all registered firms for the years
1998-2003. The analysis uses structural estimates of the
production function and exploits spatial variations in
conflict intensity to derive the cost of conflict on firms
in terms of productivity loss. The results indicate that the
conflict led to an average 16-23 percent drop in firm total
factor productivity and the decline is 5-10 percentage
points larger for firms that are owned by or employing
foreigners. These results are consistent with anecdotal
evidence of increasing violent attacks and looting of
foreigners and their businesses during the conflict. The
results suggest increases in operating costs is a possible
channel driving this impact. Finally, the paper investigates
whether firms responded by hiring fewer foreign workers and
finds evidence supporting this hypothesis. |
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