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:
(December 2019) |
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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 begin by developing a method for observing firm location choice with phone data, and validate these measurements using independent sources of administrative and survey data. Next, we show that deadly terrorist attacks reduce the presence of firms in targeted districts by 4-6%. The effect includes both an increase in the local exit of existing firms following attacks and a decrease in new rm entry. We find large negative spillovers from attacks in provincial capitals on rm presence in nearby rural districts. After violence, employees in provincial capitals are 33% more likely to move to Kabul and 15% more likely to leave for another province.
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 begin by developing a method for observing firm location choice with phone data, and validate these measurements using independent sources of administrative and survey data. Next, we show that deadly terrorist attacks reduce the presence of firms in targeted districts by 4-6%. The effect includes both an increase in the local exit of existing firms following attacks and a decrease in new rm entry. We find large negative spillovers from attacks in provincial capitals on rm presence in nearby rural districts. After violence, employees in provincial capitals are 33% more likely to move to Kabul and 15% more likely to leave for another province.