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We combine georeferenced data on mining extraction of 14 minerals with information on conflict events at spatial resolution of 0.5 degree x 0.5 degree for all of Africa between 1997 and 2010. Exploiting exogenous variations in world prices, we find a positive impact of mining on conflict at the local level. Quantitatively, our estimates suggest that the historical rise in mineral prices (commodity super-cycle) might explain up to one-fourth of the average level of violence across African countries over the period. We then document how a fighting group's control of a mining area contributes to escalation from local to global violence. Finally, we analyze the impact of corporate practices and transparency initiatives in the mining industry.
Comment les chocs de demande subis par les entreprises françaises sur leurs ventes à l’étranger se répercutent-ils sur leurs ventes en France ? Cette Lettre présente les résultats d’une analyse empirique mettant en évidence une relation de complémentarité entre exportations et ventes domestiques. Une hausse de 10% des exportations engendre, la même année, un accroissement des ventes domestiques compris entre 1% et 3% ; une baisse les réduit dans les mêmes proportions. Les contraintes de liquidité auxquelles font face les entreprises semblent jouer un rôle majeur dans la transmission à leur activité domestique du choc conjoncturel subi sur les marchés étrangers.
How do firms' sales interact across markets? Are foreign and domestic sales complements or substitutes? Using a French firm-level database combining balance-sheet and product-destination-specific export information over the period 1995–2001, we study how demand conditions in foreign markets affect domestic sales through variations in exports. We identify a number of exogenous shocks affecting the firms' demand on foreign markets, including product-destination specific imports or tariff changes, and large foreign shocks such as financial crises or civil wars. Our results show that exogenous variations in firm-level exports positively impact domestic sales, even after controlling for domestic demand conditions. A 10% exogenous increase in foreign sales generates a 1 to 3% increase in domestic sales in the short-run. This result is robust to various estimation techniques, instruments, controls, and sub-samples. It is also supported by the natural experiment of the Asian crisis in the late 1990's.
We use georeferenced information on the location of violent events in sub-Saharan African countries and provide evidence that external income shocks are important determinants of the intensity and geography of civil conflicts. More precisely, we find that (a) the incidence, intensity, and onset of conflicts are generally negatively and significantly correlated with income variations at the local level; (b) this relationship is significantly weaker for the most remote locations; and (c) at the country level, these shocks have an insignificant impact on the overall probability of conflict outbreak but do affect the probability that conflicts start in the most opened regions.
We show that the negative impact of financial crises on trade is magnified for destinations with longer time-to-ship. A simple model where exporters react to an increase in the probability of default of importers by increasing their export price and decreasing their export volumes to destinations in crisis is consistent with this empirical finding. For longer shipping time, those effects are indeed magnified as the probability of default increases as time passes. Some exporters also decide to stop exporting to the crisis destination, the more so the longer time-to-ship. Using aggregate data from 1950 to 2009, we find that this magnification effect is robust to alternative specifications, samples and inclusion of additional controls, including distance. The firm level predictions are also broadly consistent with French exporter data from 1995 to 2005.
This article analyzes the heterogeneous reaction of exporters to real exchange rate changes using a very rich French firm-level data set with destination-specific export values and volumes on the period 1995–2005. We find that high–performance firms react to a depreciation by increasing significantly more their markup and by increasing less their export volume. This heterogeneity in pricing-to-market is robust to different measures of performance, samples, and econometric specifications. It is consistent with models where the demand elasticity decreases with firm performance. Since aggregate exports are concentrated on high-productivity firms, precisely those that absorb more exchange rate movements in their markups, heterogeneous pricing-to-market may partly explain the weak impact of exchange rate movements on aggregate exports. Copyright 2012, Oxford University Press.
Motivated by the 2008–09 financial crisis and the trade collapse, the paper analyzes the effect of past banking crises (1976–2002) on trade with a focus on African exporters. The paper shows that they are particularly vulnerable to a banking crisis in the countries they export to. It also distinguishes between an income effect (during a banking crisis, income and exports to the country fall) and a disruption effect (a banking crisis disrupts the financing of trade channels). For the average country, the disruption effect is moderate (a deviation from the gravity predicted trade of between 1 and 5 percent). The paper finds however that the disruption effect is much larger and long-lasting for African exporters as the fall in trade (relative to gravity) is 10 to 15 percentage points higher than for other countries in the aftermath of a banking crisis. This vulnerability of African exports in the short run does not come from a composition effect, that is, from the fact that primary exports are disrupted more severely than manufacturing exports. Instead, the paper provides suggestive evidence that the dependence of African countries upon trade finance is an important determinant of their vulnerability to banking crises in partner countries.
We use a French firm-level data set containing 13,000 firms over the period 1994–2004 to analyze the relationship between credit constraints and firms’ R&D behavior over the business cycle. Our main results can be summarized as follows: (i) R&D investment is countercyclical without credit constraints, but it becomes procyclical as firms face tighter credit constraints; (ii) this result is only observed for firms in sectors that depend more heavily upon external finance, or that are characterized by a low degree of asset tangibility; (iii) in more credit-constrained firms, R&D investment plummets during recessions but does not increase proportionally during upturns.
Using firm-level data, we find that a currency depreciation has two opposite effects on exports when firms are indebted in foreign currency: (i) a pro-competitive effect that increases both the amount of exports by firm (the intensive margin) and the number of firms (the extensive margin); and (ii) a balance-sheet effect that forces some firms to exit the export market and decreases the extensive margin. These results both provide an explanation for the negative reactions of trade after recent emerging market crises and document a finance-based empirical microfoundation to the 'exchange-rate disconnect puzzle'.