Replication data for: Diamonds Are Forever, Wars Are Not: Is Conflict Bad for Private Firms?
Principal Investigator(s): View help for Principal Investigator(s) Massimo Guidolin; Eliana La Ferrara
Version: View help for Version V1
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Project Citation:
Guidolin, Massimo, and La Ferrara, Eliana. Replication data for: Diamonds Are Forever, Wars Are Not: Is Conflict Bad for Private Firms? Nashville, TN: American Economic Association [publisher], 2007. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116299V1
Project Description
Summary:
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This paper studies the relationship between civil war and the value of firms in a poor, resource-abundant
country using microeconomic data for Angola. We focus on diamond mining firms and conduct an event
study on the sudden end of the conflict, marked by the death of the rebel movement leader in 2002. We find
that the stock market perceived this event as "bad news" rather than "good news" for companies holding
concessions in Angola, as their abnormal returns declined by 4 percentage points. The event had no effect
on a control portfolio of otherwise similar diamond mining companies. This finding is corroborated by
other events and by the adoption of alternative methodologies. We interpret our findings in light of
conflict-generated entry barriers, government bargaining power, and transparency in the licensing process. (JEL D74, G32, O13, O17, Q34)
Scope of Project
JEL Classification:
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D74 Conflict; Conflict Resolution; Alliances; Revolutions
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Q34 Natural Resources and Domestic and International Conflicts
D74 Conflict; Conflict Resolution; Alliances; Revolutions
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Q34 Natural Resources and Domestic and International Conflicts
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