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Climate shocks and economic resilience: Evidence from Zambia's formal sector

Author

Listed:
  • Kwabena Adu-Ababio
  • Evaristo Mwale
  • Rodrigo Oliveira

Abstract

Low-income countries face the combined challenges of climate shocks and limited domestic revenue mobilization, yet these issues are rarely studied together. This paper provides new evidence on the impact of climate shocks on firm performance and tax revenue in a low-income country context, using firm-level data from Zambia. We find that extreme weather events, such as excessive rainfall and high temperatures, significantly reduce firms' sales, input purchases, and tax collection, particularly in sectors such as manufacturing, retail, accommodation, and construction.

Suggested Citation

  • Kwabena Adu-Ababio & Evaristo Mwale & Rodrigo Oliveira, 2024. "Climate shocks and economic resilience: Evidence from Zambia's formal sector," WIDER Working Paper Series wp-2024-71, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2024-71
    as

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    References listed on IDEAS

    as
    1. Suresh De Mel & David McKenzie & Christopher Woodruff, 2012. "Enterprise Recovery Following Natural Disasters," Economic Journal, Royal Economic Society, vol. 122(559), pages 64-91, March.
    2. Salvador Barrios & Luisito Bertinelli & Eric Strobl, 2010. "Trends in Rainfall and Economic Growth in Africa: A Neglected Cause of the African Growth Tragedy," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 350-366, May.
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    More about this item

    Keywords

    Value-added tax; Weather shock; Zambia; Domestic revenue mobilization; Firms;
    All these keywords.

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