Firms amid conflict: Performance, production inputs, and market competition✩

• 成果类型: Article
• 署名作者: Del Prete, Davide; Di Maio, Michele; Rahman, Aminur
• 署名单位: Parthenope University Naples; Sapienza University Rome; IZA Institute Labor Economics; Asian Development Bank
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2023.103143
• 发表日期: 2023
• 关键词: firms; CONFLICT; Foreign workers; Foreign Imported inputs; Market competition; LIBYA

摘要

We study the effect of conflict on firms' economic performance and the underlying mechanisms. We develop a simple theoretical framework in which conflict reduces a firm's output, induces input substitution, and increases firms' exit. In our empirical analysis, we combine an original dataset of Libyan firms and geolocalized data on conflict events during the Second Libyan Civil War to show that, in line with the predictions of the model, conflict reduces a firm's revenues and increases exit, relatively more for firms intensive in foreign inputs. We also document that, conditional on survival, the negative effect of conflict on revenues is nonlinear, with its marginal effect decreasing as conflict intensity increases. Two mechanisms drive this result: the heterogeneous conflict-induced reduction in the availability of production inputs and the weaker market competition due to the conflict-induced decrease in the number of a firm's competitors.