How Do Firms Respond to Insecurity?
Evidence from Afghan Corporate Phone Records
with Josh Blumenstock, Tarek Ghani, Ethan Kapstein, Thomas Scherer, and Ott Toomet
Evidence from Afghan Corporate Phone Records
with Josh Blumenstock, Tarek Ghani, Ethan Kapstein, Thomas Scherer, and Ott Toomet
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Most Recent Version:
(June 2020) |
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Abstract:
We provide new evidence on how insecurity affects firm behavior by linking data on violent conflict in Afghanistan to geo-stamped corporate mobile phone records. We develop a method for observing firm location choice and validate it with independent sources of administrative and survey data. Terrorist attacks reduce firm presence by 4-6% in affected districts with large negative spillovers from attacks in provincial capitals on surrounding rural districts. After violence, employees in provincial capitals are 33% more likely to move to Kabul and 15% more likely to exit the province. Effects are strongest when employees are outside their firm's primary district.
We provide new evidence on how insecurity affects firm behavior by linking data on violent conflict in Afghanistan to geo-stamped corporate mobile phone records. We develop a method for observing firm location choice and validate it with independent sources of administrative and survey data. Terrorist attacks reduce firm presence by 4-6% in affected districts with large negative spillovers from attacks in provincial capitals on surrounding rural districts. After violence, employees in provincial capitals are 33% more likely to move to Kabul and 15% more likely to exit the province. Effects are strongest when employees are outside their firm's primary district.