POLICY BRIEF - Conflict and Input Misallocation in the Manufacturing Sector:

While the government claims that the expansion aimed to accommodate the demands for residential, commercial, and industrial properties by a growing middle class in the capital because of an economic boom (Martin and Warner, 2015), the protesters view the plan as a ploy by the other ethnic groups to displace Oromo ethnic farmers (Robins-Early, 2016). [...] The closure of roads spread to the Amhara region, the second largest region in the country, by the beginning of 2016. [...] Supply chain disruption: The destruction of input supplier firms, the closure of roads, and the disruption of international trade routes disrupt upstream and downstream firms in the supply value chain. [...] The census provides detailed information about the firm’s revenues, total capital stock, total employment, the value, and quantity of goods the firms produce, type of ownership, location of the firms, and exporting and importing status. [...] coNflict aNd iNPut MisallocatioN iN the MaNufacturiNg sector: evideNce froM ethioPia 9 Conclusion and policy implications This paper provides empirical evidence on the microeconomic mechanisms behind the relationship between conflict and economic outcomes in the context of Ethiopia.