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CEP discussion paper
Globalization and conflicts: the good, the bad and the ugly of corporations in Africa
Tommaso Sonno
January 2020
Paper No' CEPDP1670:
Full Paper (pdf)

JEL Classification: C23; D74; F23; L70; O13

Tags: multinationals; civil conflict; fdi; ethnic minority

Using georeferenced data on the affiliates and headquarters of multinational enterprises together with georeferenced conflict data, this work is the first to establish a causal link between the activities of multinational enterprises and violence. The results indicate that activities which increase local human capital, such as education and health, decrease the probability of civil conflict, while the activity of sectors intense in scarce resources, in particular forestry, increases conflict. The increase in the likelihood of conflict is amplified especially in areas where the leading ethnic groups can place the burden of land deals on unrepresented groups.