Event Details

The Economics Department are delighted to host the Economics Seminar Series

Michele Di Maio will give a talk on "Firms amid conflict: Performance, production inputs, and market competition"

Authors: Davide Del Prete, Michele Di Maio and Aminur Rahman

Abstract: We study the effect of conflict on firm’s economic performance and explore the underlying mechanisms. Combining a novel retrospective panel dataset of Libyan firms with geo-localized data on conflict events, we build a firm-specific measure of conflict exposure and use a within-firm variation empirical strategy to show that the relationship between conflict exposure and firm’s economic performance is convex. This is the result of the combined effect of two opposite mechanisms. Revenues decrease because of the conflict-induced lower availability of production inputs. At the same time, revenues tend to increase because of the conflict-induced reduction in the number of competitors which weakens market competition for the surviving firms.