Syrian business development and regional trade in a humanitarian setting

Enhancing evidence transferability

Ceren Baysan

University of Essex

Harvard Business School
HSBC Business School at Peking University

February 2020 to January 2021

Exploratory project

Turkey, Syria

This project will explore the dynamics of the economics system of small and medium-sized enterprises (SMEs) that has developed in Syria and Turkey as a result of the conflict. Specifically it will ask:

1. What are the magnitudes of search and contracting frictions faced by Syrian-owned SMEs within the domestic market in Turkey and in the region? How does this vary by sector and by regions that are under different forces occupying Syria? Is price dispersion of basic consumer goods in Syria greater between areas occupied by different forces or are markets integrated irrespective of dynamics between factions?
2. What is the pass through of price shocks, which can be triggered by changes in the immediate geopolitical environment or incidents of conflict, both between regions in Syria and from Syria to businesses in Turkey?

The study team will carry out qualitative work to document the process for census data collection in Turkey and Syria and use each census to select a random sample of SMEs and retailers.
They will analyse the panel data to provide a comprehensive and descriptive analysis of the domestic and regional markets.

They will use the data to parameterise the trade cost function and combine it with conflict data from the Armed Conflict Location and Event Data Project (ACLED) to estimate the effect of conflict in Syria on trade costs.

The study will use primary and secondary data.

Primary data:

1. Census in Gaziantep, Turkey of SMEs of wholesalers and retailers;
2. Census to identify markets, retailers, and consumers in Syria;
3. Panel survey (a detailed baseline survey and then a smaller survey every six weeks) with Syrian-owned SMEs in Turkey;
4. Panel survey to collect information of consumer prices by region and every six weeks within Syria; and
5. Tracking of changes in the geopolitical climate that may affect consumer markets and trade.

Secondary data:

1. ACLED data on conflict within Syria;
2. Turkish Statistical Institute’s monthly consumer goods price data; and
3. Syrian Economic Forum’s baseline data on 1,400 SMEs in Gaziantep Turkey.

The study findings can be useful to policymakers to inform the design and evaluation of future interventions to promote economic development and reconstruction policies in war-affected settings. Practitioners will gain a better understanding of the existing commercial networks in Syria that can be leveraged and bolstered in the reconstruction process. It will shed light on the barriers to and opportunities for formalisation of Syrian-owned SMEs.