Economic Impact of Political Protests (Strikes) on Manufacturing Firms: Evidence from Bangladesh

Abu Shonchoy and Kenmei Tsubota

MPRA Paper from University Library of Munich, Germany

Abstract: Political protests in the form of strikes, locally known as hartals, remain quite common in the Indian subcontinent countries. Such a form of protests is associated with a mass movement, intended to cause a total shutdown of economic activities and often results in coercion, violence, and damage to public and private properties. Utilizing the World Bank enterprise survey data of 2007 and 2013 of Bangladesh, this study examines the impacts of hartal on manufacturing firms. We find that political protests significantly increase the cost for firms. Using flexible cost function based on factor analysis we see the factor-neutral effect of strikes is positive and statistically significant, showing evidence of reduction of firm productivity due to hartals. However, we did not find any evidence for systematic factor re-optimization by firms -- in response to political strikes – suggesting that firms do not reallocate factor shares to tackle uncertain and irregular shocks like hartal.

Keywords: Political strikes; translog cost function; factor biased technological change (search for similar items in EconPapers)
JEL-codes: D24 D74 O14 (search for similar items in EconPapers)
Date: 2016-09-29
New Economics Papers: this item is included in nep-bec and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/74146/1/MPRA_paper_74146.pdf original version (application/pdf)

Related works:
Working Paper: Economic impact of political protests (strikes) on manufacturing firms: evidence from Bangladesh (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:74146

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().