The Impact of the Mexican Drug War on Trade
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CitationGorrin, Jesus, Jose Morales, and Bernardo Ricca. “The Impact of the Mexican Drug War on Trade.” CID Research Fellow and Graduate Student Working Paper Series 2019.109, Harvard University, Cambridge, MA, February 2019.
AbstractThis paper studies the unintended economic consequences of increases in violence following the Mexican Drug War. We study the effects on exports in municipalities with different levels of exposure to violence after the policy. A focus on exports allows us to control for demand shocks by comparing exports of the same product to the same country of destination. Building on the close elections identification strategy proposed by Dell (2015), we show that municipalities that are exogenously exposed to the Drug War experience a 40% decrease in export growth on the intensive margin. Large exporters suffer larger effects, along with exports of more complex, capital intensive, and skill intensive products. Finally, using firm level data, we provide evidence consistent with violence increasing marginal exporting costs.
Citable link to this pagehttps://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37366833