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The impact of hydrogeological events on firms: Evidence from Italy

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  • Clò, Stefano
  • David, Francesco
  • Segoni, Samuele

Abstract

Using a novel dataset of natural disasters affecting Italy from 2010 onward, we investigate the impact of hundreds of hydrogeological events on firms’ survival and performance. Despite being less extreme, these events are increasingly frequent and geographically widespread, this constituting a relevant but unexplored topic in the natural disasters literature. In order to assess the impact of multiple events occurred over several years, we implement a staggered difference-in-differences design that exploits the variation in the timing of the treatment. Our results show that hit firms have a 7.3% higher probability of exiting the market. Conditional on surviving, in the three years after the calamity, firms experience an average decline in their revenues and employment by −4.9% and −2.2%, respectively. These impacts are highest for micro-small, younger and low-tech firms.

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  • Clò, Stefano & David, Francesco & Segoni, Samuele, 2024. "The impact of hydrogeological events on firms: Evidence from Italy," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
  • Handle: RePEc:eee:jeeman:v:124:y:2024:i:c:s0095069624000160
    DOI: 10.1016/j.jeem.2024.102942
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    More about this item

    Keywords

    Climate change; Natural disasters; Floods; Landslide; Firm performance; Survival analysis; Staggered diff-in-diff; Multiple treatments;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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