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  3. òòò½Íø Journal: Economic Policy
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  5. Insecurity and Firm Displacement: Evidence from Afghan Corporate Phone Records

òòò½Íø Journal:
Economic Policy

ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)

Insecurity and Firm Displacement: Evidence from Afghan Corporate Phone Records

  • Sylvan Herskowitz
  • Joshua E. Blumenstock
  • Tarek Ghani
  • Ethan B. Kapstein
  • Thomas L. Scherer
  • Ott Toomet
òòò½Íø Journal: Economic Policy (Forthcoming)

Abstract

We provide empirical evidence on how insecurity affects firm behavior by linking data on deadly terrorist attacks in Afghanistan to geolocated data on corporate mobile phone activity. We first develop an approach to estimate the geographic footprint of firms from employee locations. Using these measures, our main analysis finds that violent shocks reduce local firm presence by both increasing firm exit and decreasing entry. Firms react most to violence in their ‘headquarters’ district. We further find suggestive evidence of persistence, stronger impacts in more secure districts, and spillovers, whereby attacks in provincial capitals reduce firm presence in surrounding rural districts.

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