Natural disasters and establishment performance: Evidence from the 2011 Rio de Janeiro Landslides

Pedro Jorge Alves, Ricardo Andrade Lima and Lucas Emanuel

Regional Science and Urban Economics, 2022, vol. 95, issue C

Abstract: This paper investigates the economic consequences of the 2011 Rio de Janeiro landslides, considered the worst weather-related natural disaster that occurred in Brazil. We evaluated the effect of the disaster on the business establishment performance and investigated the role of the main recovery policy designed for exposed business: the subsidized credit provided by the Brazilian Development Bank (BNDES). To define the affected establishments, we use georeferenced data of landslide points and calculate a simulated coverage radius of each specific point based on a prediction model of maximum run-out distance. Using a Difference-in-Differences approach, we show that establishments exposed to the disaster reacted to the unexpected shock by reducing the number of employees rather than closing their business or cutting the wages. Also, the establishments affected by the shock increased their probability of obtaining subsidized credit. This increase in subsidized credit was partially effective in mitigating the negative effects of the shock since it prevented the exposed companies from closing but did not revert the job losses.

Keywords: Natural disasters; Landslides; Subsidized credit; Brazil (search for similar items in EconPapers)
JEL-codes: H11 H77 R11 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046221001216
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:95:y:2022:i:c:s0166046221001216

DOI: 10.1016/j.regsciurbeco.2021.103761

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().