47 Pages Posted: 7 Nov 2016
Date Written: November 6, 2016
We examine the impact of widespread political strikes on the export-oriented garments industry in Bangladesh. To do so, we use the universe of political strikes and export transactions in Bangladesh during 2010 to 2013. These strikes represent uniquely targeted episodes of violence that allow us to identify its effect on exports through the transport disruption channel alone. Our results suggest that these strikes do not have a cumulative effect on a firm’s decision to export or the value of its exports. Instead, they increase the cost of transporting shipments to the port by 69 percent. Thus, our results identify an additional cost of political violence that has been under-explored in the literature. Further, our results suggest that ensuring that political violence only disrupts transportation and not production may be an effective way to shield exporters in other developing countries from the adverse effects of such violence.
Keywords: Political Violence, Exports, Garments
JEL Classification: D74, F14, O14
Suggested Citation: Suggested Citation
Ahsan, Reshad and Iqbal, Kazi, How Do Exporters Cope with Violence? Evidence from Political Strikes in Bangladesh (November 6, 2016). Available at SSRN: https://ssrn.com/abstract=2865272