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European SMEs, Corporate Finance and Economic Resilience to Floods

Author

Listed:
  • Flavio de Carolis
  • Vinzenz Peters

Abstract

We investigate how leverage and the debt maturity structure of SMEs influences their resilience to floods. Using a dataset of six million geo-coded firm-year observations across nine European countries and granular flood maps, we employ dynamic difference- in-differences estimators to assess the economic impacts of floods and the mediating effects of leverage and debt maturity. Our findings highlight a non-linear relationship between leverage and resilience. SMEs with high levels of short-term debt and low levels of long-term debt show more severe reductions in their post-flood employment growth.

Suggested Citation

  • Flavio de Carolis & Vinzenz Peters, 2025. "European SMEs, Corporate Finance and Economic Resilience to Floods," Working Papers 832, DNB.
    • Handle: RePEc:dnb:dnbwpp:832
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    More about this item

    Keywords

    Economic Resilience; Climate Change; Floods; Leverage; Small- and Medium-Sized Enterprises;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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