Natural Disasters and Firm Resilience in Italian Industrial Districts

Giulio Cainelli (), Andrea Fracasso and Giuseppe Vittucci Marzetti
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Giulio Cainelli: University of Padova

A chapter in Agglomeration and Firm Performance, 2018, pp 223-243 from Springer

Abstract: Abstract We carry out a firm-level empirical analysis to evaluate the economic impact of the sequence of earthquakes that occurred in 2012 in the Italian region of Emilia-Romagna and to address the question of whether the localization of a firm within an industrial district mitigated or exacerbated this impact. We estimate the effect of the earthquake on firms’ performance via two alternative methods: Difference-in-differences and propensity score matching in levels and first-differences. Our findings suggest that the earthquake reduced turnover, production, value added, and return on sales of the surviving firms, at least in the short term. In addition, the debt over sales ratio grew significantly more in the firms located in the areas affected by the earthquake. The empirical evidence also suggests that the negative impact of the earthquake was slightly higher for the firms located in industrial districts, thereby suggesting that, at least in the short term, the usually positive cumulative processes associated with localization within an agglomerated area could have reversed and magnified the negative impact of a disruptive exogenous supply shock.

Keywords: Agglomeration economies; Natural disaster; Resilience; Industrial districts (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:adspcp:978-3-319-90575-4_13

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DOI: 10.1007/978-3-319-90575-4_13

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