Discussion paper
DP17528 Casualties of border changes: Evidence from nighttime lights and plant exit
We investigate the economic effects of the Russia-Ukraine conflict—following the 2014 annexation of Crimea—on Russian border regions. While regions in the south gained market access, regions in the north lost because of tighter border controls and selective border closings. Using nighttime lights satellite data and geo-referenced manufacturing plant-level data, we show that regions more exposed to increasing border frictions saw less growth in lights and more plant exit after 2014. Exploiting variations in closed border crossings in the northern regions, we further document that there are quite localized effects, which suggests that cross-border labor supply might drive the observed outcomes.
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