Project Draft Paper
Geographical Exposure Conflicts and Firm Performance: Evidence from the MENA Region
Publisher
ERF
Date
November, 2020
This paper assesses the impact of insecurity generated by conflicts on firms’ performance in the Middle East and North Africa (MENA) region. It contributes to the literature in three ways. First, we try to identify the local effect of the conflict using a geospatial approach where we evaluate the exposure of each firm and their shipment routes and infrastructures to conflictual events overtime in a specific location. Second, from a methodological perspective, despite the non-availability of a large panel dataset, we adopt a simple methodology to identify the within-firm effect using the available information on its performance (measured by sales and labor productivity) in year t-2. Third, large datasets from the World Bank Enterprise Survey for six non-oil countries (Egypt, Jordan, Lebanon, Palestine, Tunisia and Morocco) were merged with geospatial measures to conflicts. Key findings show that, while battles and explosion negatively affect sales and productivity, violence against civilians and protest and riots do not have any significant impact on the variables. Moreover, when firm size is taken into consideration, the effect is mainly observed for small and mid-sized firms, large ones did not seem to be affected. Infrastructure exposure to protests and riots, was observed to negatively affect firms’ sales, especially importers, when they are located near seaports. Similarly, the term interaction with importers for airports prone to protests and riots events, was found to be statistically significant with have negative impacts.
Authors
Daniel Mirza
Professor of Economics (Tours, Loire Valley, France)
Authors
Rita Der Sarkisian
École des Ingénieurs de la Ville de...
Research Fellows
Chahir Zaki
Chaired Professor of Economics, University of Orléans