Abstract

http://ssrn.com/abstract=2417911
 


 



Taken by Storm: Business Survival in the Aftermath of Hurricane Katrina


Emek Basker


University of Missouri - Department of Economics; U.S. Census Bureau - Center for Economic Studies

Javier Miranda


U.S. Census Bureau - Center for Economic Studies

March 30, 2014


Abstract:     
We use Hurricane Katrina's damage to the Mississippi coast in 2005 as a natural experiment to study business survival in the aftermath of a cost shock. We find that damaged establishments that returned to operation were more resilient than those that had never been damaged. This effect is particularly strong for establishments belonging to younger and smaller firms. The effect of damage on establishments in older and larger chains was more limited, and they were subsequently less resilient having survived the damage. These selection effects persist up to five years after the initial shock. We interpret these findings as evidence that the effect of the shock is tied to the presence of financial and other constraints.

Number of Pages in PDF File: 45

Keywords: Retail, chain, credit constraints, hurricane, Katrina, natural disaster, exit

JEL Classification: D22, L11, L81, L83, Q54

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Date posted: March 31, 2014  

Suggested Citation

Basker, Emek and Miranda, Javier, Taken by Storm: Business Survival in the Aftermath of Hurricane Katrina (March 30, 2014). Available at SSRN: http://ssrn.com/abstract=2417911 or http://dx.doi.org/10.2139/ssrn.2417911

Contact Information

Emek Basker (Contact Author)
University of Missouri - Department of Economics ( email )
118 Professional Building
Columbia, MO 65211
United States
573-882-6023 (Phone)
573-882-2697 (Fax)
HOME PAGE: http://web.missouri.edu/~baskere/
U.S. Census Bureau - Center for Economic Studies ( email )
4600 Silver Hill Road
Washington, DC 20233-9100
United States
Javier Miranda
U.S. Census Bureau - Center for Economic Studies ( email )
4700 Silver Hill Road
Washington, DC 20233
United States
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