Targeted Economic Measures to Curb Armed Conflict? The Kimberley Process on the Trade in ‘Conflict Diamonds’

2010 ◽  
pp. 161-181 ◽  
Author(s):  
Jan Erik Wetzel
Keyword(s):  
Armed Conflict ◽  
Kimberley Process ◽  
Conflict Diamonds

scholarly journals Stock market reactions to conflict diamond trading restrictions and controversies

2016 ◽  
Vol 18 (1) ◽  
pp. 63-84 ◽  
Author(s):  
William Hutchins Seitz
Keyword(s):  
Stock Returns ◽  
Armed Conflict ◽  
Market Access ◽  
The United States ◽  
Market Reactions ◽  
Diamond Mining ◽  
Kimberley Process ◽  
Trade Regimes ◽  
Stock Market Reactions ◽  
Trading Restrictions

This article explores market reactions to regulations that addressed the link between armed conflict and the diamond industry. The results show that several regulatory actions taken by the United Nations and the United States in the early 2000s corresponded with lower stock returns for diamond mining companies. Such effects are inconsistent with predictions made by some critics of the Kimberley Process Certification Scheme. On the other hand, stock returns for jewelry companies were abnormally negative for events that hurt the reputation of conflict-free production and trade regimes. The expansion of legal diamond markets also coincided with abnormally positive returns for jewelry companies, while new restrictions on market access coincided with abnormally negative returns. The results suggest that i) diamond trade regulations affected businesses in important and measurable ways, and ii) that similar regulations may have broader applicability in related industries.

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