How Does Violence Affect Exporters? Evidence from Political Strikes in Bangladesh (with Kazi Iqbal)
Review of International Economics, 28(3): August 2020, 599-625.
Abstract: using novel daily data, we examine the impact of political violence on firm-level export activity. Our data cover the universe of political strikes and export transactions in Bangladesh during 2010 to 2013 and allow us to examine the effects of these strikes at a highly granular level. We first show that multi-day political strikes lower the likelihood that a firm will export by 6.30 percentage points. We then examine whether these disruptions result in adverse effects on export prices. Given that this violence creates greater risk of missed shipments, importers may respond by demanding lower prices as compensation. We provide the first evidence of such adverse price effects of political violence. Our results suggest that during July to December, 2013, when there was a multi-day political strike every five days, the prices of time-sensitive Bangladeshi products declined by 1.59 percent.