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The impact of floods on firms' performance

F. Coelli and Paolo Manasse

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We estimate the short-run impact of a major flood that hit the region of Veneto in 2010 on firms' performance. Using firm level data and a difference in difference approach we compare the value added growth of hit firms to the one of a control group of companies that are not exposed to the flood. The results indicate that the value added growth of affected firms is 6.9% higher two years after the flood. We further investigate the role of aid transfers in the aftermath of the disaster event. Considering both the flood and the aid treatment, we construct four mutually exclusive and exhaustive groups. The results indicate that, among firms exposed to the flood, both the ones that benefit from financial aid and the ones that don't grow faster than the reference groups of firms that neither are exposed to the flood, nor receive financial aid. We also find a 2% additional growth effect that is attributable to the contribution of aid in the recovery phase.

JEL-codes: C23 D24 Q54 R10 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-cse
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