Individual exposure to armed conflict and entrepreneurship

We study the individual level impacts of exposure to armed conflict on entrepreneurial activity. We introduce new data from a large-N field survey we conducted in Turkey in 2019. Our study is built on a natural experiment setting that allows us to identify random exposure to armed conflict, to establish a clear timeline, to isolate the individual effects from any conflict induced deterioration in the economic environment, and to demonstrate the causal impact of armed conflict exposure. We show that while exposure to the conflict environment reduces the likelihood of private economic activity, those individuals who directly experience traumatizing violent events in that environment become significantly and substantially more likely to setup their own business. However, results also indicate that, while they are more likely to venture into private economic activity, these individuals are also more likely to fail in those ventures. Our analyses indicate exposure-induced changes in outlook on life as a potential mechanism behind these causal associations.