Low-intensity Conflict and Firm Level Investment in Ethiopia

Dominik Noe () and Admasu Shiferaw ()
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Dominik Noe: Courant Research Centre-PEG, University of Goettingen

No 141, Working Papers from Department of Economics, College of William and Mary

Abstract: This paper investigates the effect of low-intensity armed conflict on firm-level investment in a Sub-Saharan African country. We match firm level panel data from Ethiopian manufacturing with battle events at the town level. Using a more precise spatial identification of conflict exposure, we find that conflict reduces the investment rate significantly even when events are not extremely violent. The adverse investment effect increases with the geographic proximity of conflict and tends to decline with the capital intensity of production.

Keywords: Armed conflict; investment; firms; Ethiopia; GIS data (search for similar items in EconPapers)
JEL-codes: D22 O12 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2013-07-25, Revised 2013-12-05
New Economics Papers: this item is included in nep-afr, nep-dev, nep-geo and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cwm:wpaper:141

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