Predicting long‐term business recovery four years after Hurricane Katrina

Purpose - This study is an empirical examination of the ongoing recovery efforts of surviving businesses in the greater New Orleans area four years after Hurricane Katrina. Factors thought to contribute to long‐term recovery were examined including internal factors (e.g. organizational size), population‐related issues (e.g. loss of customer base), and macro variables (e.g. neighborhood recovery). Problems with population issues were expected to be a primary cause of slow business recovery. The paper aims to discuss these issues. Design/methodology/approach - Managers from 186 businesses in the New Orleans area participated in the study by completing a survey. Eligible business needed to exist before Hurricane Katrina and still be operating at the time of data collection which occurred in Spring 2009. Findings - Results from analysis of variance indicated that managers from organizations performing worse compared to pre‐Katrina levels reported significantly greater problems across the internal, population‐related and macro variables. In regression analysis, only three factors within the population and macro variable areas were significant predictors of organizational performance. As expected, organizational performance was strongly predicted by population‐related issues, especially the loss of customers. Research limitations/implications - One limitation concerns the cross‐sectional design of the study which focused specifically on surviving businesses. The survivor bias in the data limits the generalizability of the results. Also, observations from businesses in the same neighborhood could be spatially dependent due to the systematic influence of external factors. Originality/value - This study provides a rare investigation of long‐term business recovery, at the organizational level of analysis, in the wake of a disaster that resulted in one of the most extreme population dislocations in US history.