GCRF - Conflict and Private Economic activity: an analysis of new harmonised household data from sub-Saharan Africa (COPE)

点击翻译按钮获取中文摘要

Some scant evidence exists that conflict influences households' investment choices in economic activities, for example by reducing investments in relatively more capital intensive activities and in activities with longer term returns. However it is unclear to what extent such results can be generalized across conflicts and what other factors may affect the direction and intensity of these effects. Beyond the type of investment, it is also not clear how changes in conflict intensity affect the growth of investment and firm size.This research aims to provide comparative evidence by improving our understanding of the impact of violent conflict on investment in entrepreneurial activities with different growth potentials. Methodology will consist in building a new dataset matching and harmonizing household surveys and violent conflict events for fragile and conflict states (FCS) in Sub-Saharan Africa (SSA). We will investigate how conflict affects the type of private investments by households - type of activity, firm size, and returns to investment - and how institutional, geographical, and individual characteristics influence this entrepreneurial choice. We will also investigate how changes in conflict intensity affect firm growth in size, investment, and profits. This project will make a number of crucial academic and policy contributions. Firstly, it will shift the focus from the effect of conflict on the number of entrepreneurial activities to the composition of entrepreneurial activities with different growth potentials. Secondly, it will improve on the identification of the average effect of conflict on entrepreneurial activity and private sector development at the micro level. Thirdly, it will improve substantially our understanding of the institutional, geographical and conflict related factors that mediate the impact of conflict on entrepreneurial activity. Furthermore, the inclusion of a large set of countries will allow to test for the external validity of these effects across several countries and types of conflict on which no such evidence exists. All these achievement will be obtained through an approach that will credibly identify the causality of conflict on economic activity through the use of a novel instrumental variable strategy and exploiting a new household panel dataset. Lastly, and more importantly, we will be able to test the effect of conflict as a barrier to firm growth in size and investment.This research adds to a debate on pressing social and policy issues: conflict and economic growth. It is therefore particularly relevant not only for the academic community, but also for policy makers, peace builders and peace keepers, NGOs operating in the field, employers, public, social and private enterprises, trade unions, training institutions and young and old members of the workforce that seek and use information on employment and investment decisions. Our dissemination plan ensures that the findings of our research reach all the above stakeholders to inform their decision-making processes.