Peaceful entry: Entrepreneurship dynamics during Colombia’s peace agreement

Carolina Bernal, Mounu Prem, Juan Vargas and Mónica Ortiz

Journal of Development Economics, 2024, vol. 166, issue C

Abstract: The end of internal conflict is often shaped by political uncertainty and threats of violence recurrence. This implies that the effects of conflict termination on economic activity and specifically entrepreneurship can go in either direction, and we know little about this relationship. Studying Colombia’s recent peace agreement with the FARC guerrilla, and using a difference-in-differences empirical strategy, we document that dynamics of entrepreneurship in traditionally violent areas closely mapped the politics that surrounded the peace agreement. When the agreement was imminent after a 5-decade conflict and violence had plummeted, local investors from all economic sectors established new firms and created jobs. Instead, when the agreement was rejected in a referendum, the party that promoted this rejection raised to power, and violence re-escalated, the rate of firms’ creation rapidly reversed.

Keywords: Firm entry; Conflict; Peace agreement; Colombia (search for similar items in EconPapers)
JEL-codes: D22 D74 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (10)

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Working Paper: Peaceful Entry: Entrepreneurship Dynamics During Colombia s Peace Agreement (2022)
Working Paper: Peaceful entry: Entrepreneurship dynamics during Colombia’s peace agreement (2022)
Working Paper: Peaceful Entry: Entrepreneurship Dynamics during Colombia's Peace Agreement (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:166:y:2024:i:c:s0304387823000743

DOI: 10.1016/j.jdeveco.2023.103119

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