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Firm Investment decisions in the post‐conflict context

Firm Investment decisions in the post‐conflict context Economic and political transition can occur through peaceful or violent means. Violent transition disrupts the incentive for firms to make productive investments. This paper studies the determinants of profit reinvestment for firms in post‐conflict transition economies. Results indicate that while access to finance is an important determinant of reinvestment during transition, it is not as important in the post‐conflict context. However, property rights protections, in particular institutions of contract enforcement, are a more important determinant of profit reinvestment for firms operating in the post‐conflict environment than for firms in general. This indicates that obstacles to investment are context specific. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics of Transition and Institutional Change Wiley

Firm Investment decisions in the post‐conflict context

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References (35)

Publisher
Wiley
Copyright
Copyright © 2015 The European Bank for Reconstruction and Development
ISSN
2577-6975
eISSN
2577-6983
DOI
10.1111/ecot.12070
Publisher site
See Article on Publisher Site

Abstract

Economic and political transition can occur through peaceful or violent means. Violent transition disrupts the incentive for firms to make productive investments. This paper studies the determinants of profit reinvestment for firms in post‐conflict transition economies. Results indicate that while access to finance is an important determinant of reinvestment during transition, it is not as important in the post‐conflict context. However, property rights protections, in particular institutions of contract enforcement, are a more important determinant of profit reinvestment for firms operating in the post‐conflict environment than for firms in general. This indicates that obstacles to investment are context specific.

Journal

Economics of Transition and Institutional ChangeWiley

Published: Oct 1, 2015

Keywords: ; ; ; ;

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