Peaceful Entry: Entrepreneurship Dynamics During Colombia s Peace Agreement

Serie

• Documentos de Trabajo

Resumen

• While there is a large literature on how conflict affects entrepreneurship and private investment, much less is known about how the end of a conflict affects businesses and firms’ creation. A priory, the direction of the effect is not obvious, as conflicts bequest poverty traps and inequality that reduce the returns of investment, and the territorial vacuum of power that is inherent to most post-conflict situations may trigger new violent cycles. Studying Colombia’s recent peace agreement and using a difference-in-differences empirical strategy, we document that dynamics of entrepreneurship in traditionally violent areas closely mapped the politics that surrounded the peace agreement. When the agreement was imminent after a 5-decade conflict and violence had plummeted, local investors from all economic sectors established new firms and created more jobs. Instead, when the agreement was rejected by a tiny vote margin in a referendum and the party that promoted this rejection raised to power, the rate of firms’ creation rapidly reversed.

autores

• Prem, Mounu
• Vargas, Juan Fernando

fecha de publicación

• 2022

Área temática

• D22 - Comportamiento de la empresa: análisis empíricos
• D74 - Conflictos; Resolución de conflictos; Alianzas; Revolución

Enfoque geográfico

• Colombia  Country
• South America  Continent

Líneas de investigación

• Colombia
• Conflict
• Firm Entry
• Peace Agreement

Issue

• 19938