Conflict and Intergroup Trade: Evidence from the 2014 Russia-Ukraine Crisis
Name
korovkin-makarin-2022-conflict-and-intergroup-trade-evidence-from-the-2014-russia-ukraine-crisis.pdf
Description
Published version
Size
2.7 MB
Format
Adobe PDF
Checksum (MD5)
9100ac10c8b1c74cac3ad8d3b7972efa
Author(s)
Korovkin, Vasily
Makarin, Alexey
Date Issued
January 2023
Journal
American Economic Review
Publisher
American Economic Association
Citation
Korovkin, Vasily, and Alexey Makarin. 2023. "Conflict and Intergroup Trade: Evidence from the 2014 Russia-Ukraine Crisis." American Economic Review 113 (1): 34–70.
Version
Final published version
Abstract
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. (JEL D74, F14, F51, J15, P31, P33, Z13)
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
Persistent DSpace Link
DOI of Published Version
10.1257/aer.20191701
