@TechReport{iza:izadps:dp9731, author={Bakshi, Dripto and Dasgupta, Indraneel}, title={Identity Conflict with Cross-Border Spillovers}, year={2016}, month={Feb}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={9731}, url={https://www.iza.org/index.php/publications/dp9731}, abstract={We model simultaneous inter and within identity-group conflict in two territories connected by cross-territorial spill-overs. Within each territory, two groups contest the division of a group-specific public good, and all members contest the division of group income. Each group has a cross-border affiliate. Greater success (share) of its affiliate 'spills over' into higher efficiency of a group in inter-group conflict. We find that inter-group and total conflict move together within a territory, while within-group conflict and output move in the opposite direction. A unilateral increase in cross-border spill-over reduces inter-group conflict in the source territory but increases it in the destination; an equi-proportionate bilateral increase affects conflict in a non-monotone manner. Population increase in a territory, a larger minority, weaker property rights, higher relative labour productivity of the majority, may all increase inter-group conflict in the other territory. Community-neutral growth in labour productivity within a territory reduces inter-group conflict therein.}, keywords={cross-border spillover;simultaneous between and within group contest;identity;ethnic conflict;globalization;ethnic polarization;community-biased growth}, }