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Predicting small business demise after a natural disaster: an analysis of pre-existing conditions

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  • Maria Marshall
  • Linda Niehm
  • Sandra Sydnor
  • Holly Schrank

Abstract

Few studies of small businesses have addressed demise in post-disaster environments, and the factors that lead to business demise after natural disasters are not well understood. This study explored demise by interviewing a random sample of small business owners whose businesses survived or met demise following Hurricane Katrina. The goal of this study was to determine whether businesses that met demise could be predicted based on pre-existing characteristics of those businesses and their owners. Findings indicated that businesses owned by women, minorities, and veterans were more likely to meet demise. Owners with more industry experience and older businesses were less likely to meet demise, along with larger businesses (number of employees) and service-based businesses. Businesses that had prior disaster experience and prior cash flow problems were also less likely to meet demise post-Katrina, suggesting that prior experiences with some type of adversity may provide knowledge and insight that aid small business owners during subsequent experiences during disaster preparation, response, and recovery periods. Home-based businesses were also less likely to meet demise, whereas businesses located in coastal counties were more likely to meet demise. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Maria Marshall & Linda Niehm & Sandra Sydnor & Holly Schrank, 2015. "Predicting small business demise after a natural disaster: an analysis of pre-existing conditions," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 79(1), pages 331-354, October.
    • Handle: RePEc:spr:nathaz:v:79:y:2015:i:1:p:331-354
    DOI: 10.1007/s11069-015-1845-0
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    References listed on IDEAS

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    1. Kathryn Stafford & Vibha Bhargava & Sharon Danes & George Haynes & Katherine Brewton, 2010. "Factors Associated with Long-Term Survival of Family Businesses: Duration Analysis," Journal of Family and Economic Issues, Springer, vol. 31(4), pages 442-457, December.
    2. Maria Marshall & Holly Schrank, 2014. "Small business disaster recovery: a research framework," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 72(2), pages 597-616, June.
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    5. Holly Schrank & Maria Marshall & Adrienne Hall-Phillips & Renee Wiatt & Nicole Jones, 2013. "Small-business demise and recovery after Katrina: rate of survival and demise," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 65(3), pages 2353-2374, February.
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    Cited by:

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    5. Hiramatsu, Tomoko & Marshall, Maria I., 2017. "The effect of Small Business Administration (SBA) Disaster Loans on Revenues of Small Businesses in Mississippi after Hurricane Katrina," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252713, Southern Agricultural Economics Association.
    6. Mahto, Raj V. & Llanos-Contreras, Orlando & Hebles, Melany, 2022. "Post-disaster recovery for family firms: The role of owner motivations, firm resources, and dynamic capabilities," Journal of Business Research, Elsevier, vol. 145(C), pages 117-129.
    7. Takahiro Yabe & Yunchang Zhang & Satish Ukkusuri, 2020. "Quantifying the Economic Impact of Extreme Shocks on Businesses using Human Mobility Data: a Bayesian Causal Inference Approach," Papers 2004.11121, arXiv.org.
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    14. Maria I. Marshall & Holly L. Schrank, 2020. "Sink or Swim? Impacts of Management Strategies on Small Business Survival and Recovery," Sustainability, MDPI, vol. 12(15), pages 1-21, August.
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    18. Renee D. Wiatt & Yoon G. Lee & Maria I. Marshall & Virginia S. Zuiker, 2021. "The Effect of Cash Flow Problems and Resource Intermingling on Small Business Recovery and Resilience After a Natural Disaster," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 203-214, March.

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