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Title: Domestic Terrorism and Economic Activity: Evidence from African American Patents, 1870 to 1940

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: Recent studies have examined the effect of political conflict and domestic terrorism on economic and political outcomes, e.g., output, investment, and elections. New data on patents obtained by African Americans from 1870 to 1940 provide a natural experiment for determining the impact of political and ethnic violence on economic activity. Hate-related acts, such as mob violence, are found to depress patenting activity among blacks by 50 percent. A similar shock to white inventors would have resulted in a 48-percent decline and significantly more volatility in U.S. patenting activity over the same period. In particular, economically meaningful patents respond negatively to extrajudicial killings and to state and federal laws promoting segregation. The evidence suggests that more important than mob violence and segregation laws is the systematic federal decision not to restore the rule of law. Further, patenting rates respond quickly and positively to declines in race-related violence and to national efforts to end violence. These findings imply that, then and now, ethnic and political conflict and resulting uncertainty in property-rights enforcement may persistently affect the level, direction, and quality of inventive activity and, hence, economic growth. (JEL D74, G11, N70, O17, O31, P16)

Url: https://www.law.umich.edu/centersandprograms/lawandeconomics/workshops/Documents/Fall2008/cook.pdf

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Authors: Cook, Lisa D

Publisher: The University of Michigan Law School

Data Collections: IPUMS USA

Topics: Race and Ethnicity

Countries: United States