Mehak Majeed

Firm Behavior in Fragility

Analyzing the Impact of Kashmir Conflict on Firm Activity


Submitted By

Mehak Majeed

Research Scholar, Department of Economics, University of Kashmir


Under the Supervision of

Dr.Javaid Iqbal Khan

                                                                                                                       (Sr. Assistant Professor, Department of Economics, University of Kashmir



The proposed study aims to analyze the impact of Fragility, Political Instability and Conflict on the economy of a country, taking into account the production side. The study analizes the situation by using the primary data along with the secondary data, guided by and based on the extension of Gries and Naude model (2010). Further, modifications into the farm model of Singh, et al (1986) with respect to decision making are made to capture the entrepreneur’s decision making tendencies in case of uncertain business environments that exist concurrently in situations of fragility.  Grounding the analysis on production function approach and introducing the concept of fragility as an additional variable to the orthodox production function, the Modified Production Function (MPF) capturing entrepreneurship and fragility is estimated to arrive at some empirically validating impact of fragility on various production decisions of the firm.

The study is based on the ascertained objectives complementing and fostering the aim of the proposed analysis viz. studying the impact of negative externalities and exogenous variables on the expectations of the firm. The study further traces the trajectory and path of the firm’s growth. Studying the firm dynamics and the ultimate determining factor of entrepreneurial abilities follow the analysis in a systematic order.

Given the aforementioned objectives, the analysis takes along the investigation to determine and foster the nature and importance of the efficient entrepreneur. It is indeed the efficiency in entrepreneurship that determines the level and extents of firm survival in fragile conditions. This much understood, the study make an empirical estimation and answers important questions raised by the study. The impact of fragility on selected industries is studies in depth and the impact of the same on sensitive and determining variables of the firms is strived upon. The shocks are studied using suitable quantitative proxies to determine the impact of the same on the economic variables of interest.

The study wraps up by learning the perceptive and tactic skills of the efficient entrepreneurs who come up with the cooping strategies. How they study the fragility, face the shocks, absorb them and come with their innovative means to tackle the same and keep the firm in activity and business, moving towards sustainability and prolonged profitable existence.