In the eye of the storm: Firms and capital destruction in India

Martino Pelli, Jeanne Tschopp, Natalia Bezmaternykh and Kodjovi Eklou

Journal of Urban Economics, 2023, vol. 134, issue C

Abstract: The number and strength of climate-change-related disasters is increasing, and developing countries are bearing most of the brunt. In this paper we study how firms react to tropical cyclones in India. Using a panel of manufacturing firms between 1995 and 2006 and cyclone data from the National Oceanic and Atmospheric Administration, we find that the average cyclone destroys 2.2% of a firm’s fixed assets and decreases its sales by 3.1%. The impacts of the average cyclone are temporary and disappear after one year. Focusing on the heterogeneity of these results by firm and industry quality, we also find that capital and sales reallocate toward better-performing industries. Within industry, firm quality only matters for the response of sales.

Keywords: Storms; India; Firms; Capital (search for similar items in EconPapers)
JEL-codes: D22 D24 O12 Q54 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: In the Eye of the Storm Firms and Capital Destruction in India (2020)
Working Paper: In the Eye of the Storm: Firms and Capital Destruction in India (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:134:y:2023:i:c:s009411902200105x

DOI: 10.1016/j.jue.2022.103529

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