TAKEN BY STORM: BUSINESS SURVIVAL IN THE AFTERMATH OF HURRICANE KATRINA

Emek Basker and Javier Miranda

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We use Hurricane Katrina's damage to the Mississippi coast in 2005 as a natural experiment to study business survival in the aftermath of a cost shock. We find that damaged establishments that returned to operation were more resilient than those that had never been damaged. This effect is particularly strong for establishments belonging to younger and smaller rms. The effect of damage on establishments in older and larger chains was more limited, and they were subsequently less resilient having survived the damage. These selection effects persist up to five years after the initial shock. We interpret these findings as evidence that the effect of the shock is tied to the presence of financial and other constraints.

Keywords: Retail; chain; credit constraints; hurricane; Katrina; natural disaster; exit (search for similar items in EconPapers)
JEL-codes: D22 L11 L81 L83 Q54 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:14-20

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