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The effect of Small Business Administration (SBA) Disaster Loans on Revenues of Small Businesses in Mississippi after Hurricane Katrina

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  • Hiramatsu, Tomoko
  • Marshall, Maria I.

Abstract

The US government provided $2.6 billion of Small Business Administration (SBA) disaster loans to individuals and businesses in Mississippi after Hurricane Katrina in 2005 (FEMA 2015). However, existing literature has not fully explored the firm-level effects of post-disaster loan aid; specifically the effect on small businesses. The objective of this paper is to examine whether SBA disaster loans played a significant role in the performance of small businesses after Hurricane Katrina. Data from a sample of 373 businesses in Mississippi that were operating before Hurricane Katrina and still operating in 2013 were used in the analysis. Two hypotheses were tested: 1. Small business owners that received SBA disaster loans have higher revenue change compared to before Katrina than those who did not receive the loan; 2. Small business owners that received SBA disaster loans perceived their businesses to have higher revenue than before Katrina. Receiving a SBA disaster loan did not play statistically significant role in determining the actual revenue change. However, SBA disaster loans had a negative and statistically significant association with owners’ perception on change of revenue compared to pre-Katrina levels.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:saea17:252713
    DOI: 10.22004/ag.econ.252713
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    References listed on IDEAS

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    1. 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.
    2. Elizabeth Ann Dietch & Christy M. Corey, 2011. "Predicting long‐term business recovery four years after Hurricane Katrina," Management Research Review, Emerald Group Publishing Limited, vol. 34(3), pages 311-324, March.
    3. 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.
    4. Richard Williams, 2012. "Using the margins command to estimate and interpret adjusted predictions and marginal effects," Stata Journal, StataCorp LP, vol. 12(2), pages 308-331, June.
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