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Peaceful Entry: Entrepreneurship Dynamics during Colombia's Peace Agreement

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  • Bernal, Carolina
  • Prem, Mounu
  • Vargas, Juan F.
  • Ortiz, Mónica

Abstract

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.

Suggested Citation

  • Bernal, Carolina & Prem, Mounu & Vargas, Juan F. & Ortiz, Mónica, 2022. "Peaceful Entry: Entrepreneurship Dynamics during Colombia's Peace Agreement," SocArXiv 3y7gk_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:3y7gk_v1
    DOI: 10.31219/osf.io/3y7gk_v1
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