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Measuring and understanding the microeconomic resilience of businesses to lifeline service interruptions due to natural disasters

Author

Listed:
  • Nina Graveline

    (BRGM - Bureau de Recherches Géologiques et Minières)

  • Marine Gremont

    (BRGM - Bureau de Recherches Géologiques et Minières)

Abstract

Facing rising natural hazards, urban environments are particularly prone to suffer economic impacts from business interruptions due to disaster-induced lifeline service disruptions. Enhancing the ability of local economies to maintain function and hasten recovery in the aftermath of natural disasters triggers the need to both measure economic resilience and better understand its drivers. Based on a conceptual framework that highlights the peculiarities of resilience with respect to vulnerability and adaptation, this paper develops a scientifically sound operational indicator of the economic resilience of individual businesses to lifeline service interruptions caused by natural disasters. The indicator is constructed so as to compare patterns of economic resilience across firms or events and identify hotspots of poor resilience that public policies should target as a priority. In order to demonstrate its scientific and operational relevance, it is applied to individual businesses located in the Urban Community of Central Martinique (French West Indies). A business survey is used to collect empirical data for two hypothetical equal hazard scenarios leading to the disruption of the drinking water and electricity networks. An econometric analysis then investigates the dependence of economic resilience to a set of individual characteristics such as business demographics and operating characteristics. Results show that businesses are relatively more resilient to drinking water interruptions than to electricity cuts and that turnover and flexibility in both working hours and production processes are significant drivers of economic resilience. We discuss the limitations of this indicator and pinpoint the challenge for future research of isolating pre-existing sensitivity to shocks from overall economic impacts.

Suggested Citation

  • Nina Graveline & Marine Gremont, 2017. "Measuring and understanding the microeconomic resilience of businesses to lifeline service interruptions due to natural disasters," Post-Print hal-01631780, HAL.
    • Handle: RePEc:hal:journl:hal-01631780
    DOI: 10.1016/j.ijdrr.2017.05.012
    Note: View the original document on HAL open archive server: https://hal.science/hal-01631780
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    3. Azzam, Azzeddine & Gren, Ing-Marie & Andersson, Hans, 2023. "Comparative resilience of US and EU meat processing to the Covid19 pandemic," Food Policy, Elsevier, vol. 119(C).
    4. Dormady, Noah C. & Rose, Adam & Roa-Henriquez, Alfredo & Morin, C. Blain, 2022. "The cost-effectiveness of economic resilience," International Journal of Production Economics, Elsevier, vol. 244(C).
    5. Unay-Gailhard, İlkay & Bojnec, Štefan, 2020. "Public support effect on natural disaster management: A case study of ice storms in forests in Slovenia," Land Use Policy, Elsevier, vol. 95(C).
    6. Alex Y. Lo & Shuwen Liu & Alice S. Y. Chow & Qing Pei & Lewis T. O. Cheung & Lincoln Fok, 2021. "Business vulnerability assessment: a firm-level analysis of micro- and small businesses in China," 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. 108(1), pages 867-890, August.
    7. Dan Wei & Zhenhua Chen & Adam Rose, 2020. "Evaluating the role of resilience in reducing economic losses from disasters: A multi‐regional analysis of a seaport disruption," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1691-1722, December.
    8. Erika Quendler & Mangirdas Morkūnas, 2020. "The Economic Resilience of the Austrian Agriculture since the EU Accession," JRFM, MDPI, vol. 13(10), pages 1-20, October.
    9. Belhadi, Amine & Kamble, Sachin & Jabbour, Charbel Jose Chiappetta & Gunasekaran, Angappa & Ndubisi, Nelson Oly & Venkatesh, Mani, 2021. "Manufacturing and service supply chain resilience to the COVID-19 outbreak: Lessons learned from the automobile and airline industries," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    10. David Nortes Martínez & Frédéric Grelot & Pauline Brémond & Stefano Farolfi & Juliette Rouchier, 2024. "Effects of flood‐induced financial stress on the viability of a cooperative production system and its farmers: A multilevel study," Post-Print hal-04443707, HAL.
    11. Alex Y. Lo & Alice S. Y. Chow & Shuwen Liu & Lewis T. O. Cheung, 2019. "Community business resilience: adaptation practice of micro- and small enterprises around the Pearl River Estuary," Climatic Change, Springer, vol. 157(3), pages 565-585, December.
    12. Dormady, Noah & Roa-Henriquez, Alfredo & Rose, Adam, 2019. "Economic resilience of the firm: A production theory approach," International Journal of Production Economics, Elsevier, vol. 208(C), pages 446-460.
    13. Agnieszka Karman, 2020. "An examination of factors influencing the application of mechanisms of organizations' resilience to weather extremes," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 276-290, January.
    14. Manu Sharma & Deepak Kaushal & Sudhanshu Joshi, 2023. "Strategic measures for enhancing resiliency in knowledge base supply chains: an emerging economy perspective," Operations Management Research, Springer, vol. 16(3), pages 1185-1205, September.

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    More about this item

    Keywords

    Indirect impacts; Resilience indicator; Business interruption; Lifeline service disruption; Disaster risk reduction; Economic resilience;
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