Working Paper: NBER ID: w29297
Authors: Christopher Ksoll; Rocco Macchiavello; Ameet Morjaria
Abstract: Violent conflicts, particularly at election times in Africa, are a common cause of instability and economic disruption. This paper studies how firms react to electoral violence using the case of Kenyan flower exporters during the 2008 post-election violence as an example. The violence induced a large negative supply shock that reduced exports primarily through workers' absence and had heterogeneous effects: larger firms and those with direct contractual relationships in export markets suffered smaller production and losses of workers. On the demand side, global buyers were not able to shift sourcing to Kenyan exporters located in areas not directly affected by the violence nor to neighboring Ethiopian suppliers. Consistent with difficulties in insuring against supply-chain risk disruptions caused by electoral violence, firms in direct contractual relationships ramp up shipments just before the subsequent 2013 presidential election to mitigate risk.
Keywords: Electoral violence; Supply chain disruptions; Kenya; Floriculture industry
JEL Codes: D22; D74; F14; O13; Q13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Electoral violence in 2008 (K16) | Negative supply shock (E31) |
| Negative supply shock (E31) | Drop in weekly export volumes (F10) |
| Workers' absence (J22) | Production outcomes (E23) |
| Electoral violence in 2008 (K16) | Workers' absence (J22) |
| Stable contractual relationships (L14) | Smaller proportional losses in production (D20) |
| Stable contractual relationships (L14) | Fewer worker absences (J22) |
| Global buyers' inability to shift sourcing (F61) | Difficulties in managing supply chain risks (M11) |