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E&F Talk Michele Di Maio (Rome): Firms amid conflict: Performance, production inputs, and market competition

The departement of Economics & Finance is happy to welcome Michele Di Maio from Sapienza University, Rome.

External guests are requested to register by email to Sven.Fischer@brunel.ac.uk

Speaker: Michele Di Maio (Sapienza Univeristy, Rome)

Title: Firms amid conflict: Performance, production inputs, and market competition

Abstract: We study the effect of conflict on firms’ economic performance and explore the underlying mechanisms. Combining an original panel dataset of Libyan firms with geolocalized data on conflict events, we build a firm-specific measure of conflict exposure and use its within-firm variation to show that the relationship between conflict exposure and performance is convex.

This is the result of two opposite mechanisms. Revenues decrease because of the conflict-induced lower availability of production inputs. At the same time, revenues tend to increase for surviving firms that face weaker market competition because of the conflict-induced reduction in the number of competitors.