How Does Violence Affect Exporters? Evidence from Political Strikes in Bangladesh*

Using novel, high-frequency data on political strikes in Bangladesh, we examine the impact of political violence on firm-level export activity. Our data cover the universe of political strikes and export transactions in Bangladesh during 2010 to 2013. Using an event-study approach, we find that there is a 16.26 percent reduction in the baseline probability of exporting on the day of a strike. Most of these shipments are reallocated to the day before the strike, while the remaining shipments are delayed by up to six days. We then use countryand product-level data to examine the broader implications of these disruptive effects. We show that countries with greater political violence tend to have a comparative disadvantage in higher-priced products. This suggests that political violence can prevent a country from moving up the export value chain.