CONFLICT AND FIRM DYNAMICS - Some issues and some wishes In the past two decades, the literature on the economics of conflict has grown significantly in both quantity and quality due to the increasing availability of micro-level data sets. As a consequence, we now know much more about the effects of conflict on health, education and employment and about how, for instance, extremely poor health conditions or ethnic differences may facilitate the beginning and the persistence of conflict. Yet, very few contributions in the literature have focused on how a violent conflict may have an impact on firm dynamics and how firms’ activities may favor the onset of conflict. This is paradoxical given the centrality of firms’ performance in the process of economic development. In this sense, the economics of conflict literature seems to still lack a good understanding of the economic part of the story. Curiously, the main constraint on the improvement of our knowledge on the relationship between violent conflict and firm dynamics is often not the availability of conflict data—which is now available for several conflicts—but instead that of firm-level data. Statistical agencies in conflict-ridden countries obviously have serious difficulties in collecting this data, but this is not the only reason for the scarcity of this information. In the first place, entrepreneurs are usually more reluctant than households to divulge information, especially during a conflict. This is compounded by the unwillingness of some statistical agencies to share all the information they have, especially information related to the location of the firm, which makes it almost impossible to carry out empirical analyses. The motivation for this behavior usually stems from the desire for confidentiality. In most cases, this is a weak excuse since, even though the number of observations in an enterprise survey is significantly smaller than that of a typical household survey, it would be impossible to identify a specific firm. While this fact is absolutely clear to any researcher, it seems not to be so clear to several statistical agencies around the world. Keep reading from us and i believe in the shortest possible time, we shall all be able to solve some of these issues.
Posted on: Sun, 15 Sep 2013 12:14:38 +0000
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