Conflict and intergroup trade: evidence from the 2014 Russia-Ukraine crisis

0582603 - NHU-C 2024 RIV US eng J - Journal Article
Korovkin, Vasily - Makarin, A.
Conflict and intergroup trade: evidence from the 2014 Russia-Ukraine crisis.
American Economic Review. Roč. 113, č. 1 (2023), s. 34-70. ISSN 0002-8282. E-ISSN 1944-7981
Grant - others:Univerzita Karlova(CZ) UNCE/HUM/035
Institutional support: Cooperatio-COOP
Keywords : foreign intervention * institutions * networks
OECD category: Applied Economics, Econometrics
Impact factor: 10.7, year: 2022
Method of publishing: Limited access
https://doi.org/10.1257/aer.20191701

Does armed conflict reduce trade, even in noncombat areas, through the destruction of intergroup social capital? We analyze Ukrainian trade transactions before and after the 2014 Russia-Ukraine conflict. In a difference-in-differences framework, we find that Ukrainian firms from districts with fewer ethnic Russians experienced a deeper decline in trade with Russia. This decline is economically significant, persistent, and can be explained by erosion of intergroup trust. Affected Ukrainian firms suffered a decrease in performance and diverted trade to other countries. Our results suggest that, through social effects, conflict can be economically damaging even away from combat areas.
Permanent Link: https://hdl.handle.net/11104/0350686


Research data: OPENICPSR