CLEAN - LSE Seminar Series - Luis R. Martínez (University of Chicago)


The next CLEAN seminar, in collaboration with LSE, will take place on Wednesday, May 15th 2024, from 4-5 p.m. Italian time.

The presenter will be Luis R. Martínez (University of Chicago). The title of the paper is "Uncertainty, Peace, and Investment: Evidence from Credit Microdata in Colombia", coauthored with Nicolás de Roux (Universidad de los Andes).



We study the causal effect of the formal cessation of conflict on investment. Our difference-in-difference strategy combines the 2016 peace agreement between the Colombian government and the FARC insurgency with pre-existing differences in FARC exposure across municipalities. Using administrative data from a large bank serving agricultural producers, we document a sizable increase in business credit in FARC municipalities after the peace deal is finalized. Higher loan applications for long-term investments drive this increase, without any change in supply-side factors. Investment only increases in municipalities located close to markets and does not increase during the peace negotiations, despite a meaningful decline in violence. This indicates that uncertainty is a major deterrent for investment and that peace is complementary to market access. There is no change in loan misuse or delinquency, which suggests that the new loans correspond to profitable projects. Higher night-time luminosity provides further evidence of an economic peace dividend.


You may follow the event online via Zoom Meetings at the following link: - Meeting ID: 935 3789 3727 - Passcode: 327396