Measuring and understanding the microeconomic resilience of businesses to lifeline service interruptions due to natural disasters

Nina Graveline () and Marine Gremont ()
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Nina Graveline: BRGM - Bureau de Recherches Géologiques et Minières
Marine Gremont: BRGM - Bureau de Recherches Géologiques et Minières

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Abstract: Facing rising natural hazards, urban environments are particularly prone to suffer economic impacts from business interruptions due to disaster-induced lifeline service disruptions. Enhancing the ability of local economies to maintain function and hasten recovery in the aftermath of natural disasters triggers the need to both measure economic resilience and better understand its drivers. Based on a conceptual framework that highlights the peculiarities of resilience with respect to vulnerability and adaptation, this paper develops a scientifically sound operational indicator of the economic resilience of individual businesses to lifeline service interruptions caused by natural disasters. The indicator is constructed so as to compare patterns of economic resilience across firms or events and identify hotspots of poor resilience that public policies should target as a priority. In order to demonstrate its scientific and operational relevance, it is applied to individual businesses located in the Urban Community of Central Martinique (French West Indies). A business survey is used to collect empirical data for two hypothetical equal hazard scenarios leading to the disruption of the drinking water and electricity networks. An econometric analysis then investigates the dependence of economic resilience to a set of individual characteristics such as business demographics and operating characteristics. Results show that businesses are relatively more resilient to drinking water interruptions than to electricity cuts and that turnover and flexibility in both working hours and production processes are significant drivers of economic resilience. We discuss the limitations of this indicator and pinpoint the challenge for future research of isolating pre-existing sensitivity to shocks from overall economic impacts.

Keywords: Indirect impacts; Resilience indicator; Business interruption; Lifeline service disruption; Disaster risk reduction; Economic resilience (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-env
Note: View the original document on HAL open archive server: https://hal.science/hal-01631780
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Citations: View citations in EconPapers (15)

Published in International Journal of Disaster Risk Reduction, 2017, 24, pp.526-538. ⟨10.1016/j.ijdrr.2017.05.012⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01631780

DOI: 10.1016/j.ijdrr.2017.05.012

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