Climate shocks and economic resilience: Evidence from Zambia's formal sector

Kwabena Adu-Ababio, Evaristo Mwale and Rodrigo Oliveira

No wp-2024-71, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Low-income countries face the combined challenges of climate shocks and limited domestic revenue mobilization, yet these issues are rarely studied together. This paper provides new evidence on the impact of climate shocks on firm performance and tax revenue in a low-income country context, using firm-level data from Zambia. We find that extreme weather events, such as excessive rainfall and high temperatures, significantly reduce firms' sales, input purchases, and tax collection, particularly in sectors such as manufacturing, retail, accommodation, and construction.

Keywords: Value-added tax; Weather shock; Zambia; Domestic revenue mobilization; Firms (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dev and nep-env
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