| Popis: |
The end of internal conflict are often shaped by political uncertainty and threats of violence recurrence. This implies that the effects of conflict termination on economic ac- tivity and specifically entrepreneurship can go in either direction, and we know little about this relationship. Studying Colombia’s recent peace agreement with the FARC guerrilla, and using a difference-in-differences empirical strategy, we document that dynamics of en- trepreneurship 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 jobs. Instead, when the agreement was rejected in a referendum, the party that promoted this rejection raised to power, and violence re-escalated, the rate of firms’ creation rapidly reversed. |
