Perception of political instability in election periods: Evidence from African firms

Political instability is a major obstacle to firms' investment and development. This article investigates how elections affect the perception of political instability of African firms. We use a survey-based dataset of approximately 21,500 firms in 33 African countries which we cross with 237 elections between 2004 and 2020. Our econometric strategy allows a detailed identification of election periods and the associated effects. We provide robust evidence of a pre-election increase in the perception of political instability by firms, but no, or limited post-election effects. The perception of political instability by firms is stronger for firms oriented towards foreign markets, in countries with non-democratic institutions or a high risk of conflict.
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Cazals A., Léon F. (2022, forthcoming) Perception of political instability in election periods: Evidence from African firms, Journal of Comparative Economics.

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