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Floods and Their Impacts on Firms : Evidence from Tanzania

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  • Maruyama Rentschler,Jun Erik
  • Kim,Ella Jisun
  • Thies,Stephan Fabian
  • De Vries Robbe,Sophie Anne
  • Erman,Alvina Elisabeth
  • Hallegatte,Stephane

Abstract

This study explores how businesses in Tanzania are impacted by floods, and which strategies theyuse to cope and adapt. These insights are based on firm survey data collected in 2018 using a tailoredquestionnaire, covering a sample of more than 800 firms. To assess the impact of disasters on businesses, the studyconsiders direct damages and indirect effects through infrastructure systems, supply chains, and workers. Whiledirect on-site damages from flooding can be substantial, they tend to affect a relatively small share of firms.Indirect impacts of floods are more prevalent and sizable. Flood-induced infrastructure disruptions—especiallyelectricity and transport—obstruct the operations of firms even when they are not directly located in flood zones. Theeffects of such disruptions are further propagated and multiplied along supply chains. The study estimates thatsupply chain multipliers are responsible for 30 to 50 percent of all flood-related delivery delays. To cope withthese impacts, firms apply a variety of strategies. Firms mitigate supply disruptions by adjusting the size andgeographical reach of their supply networks, and by adjusting inventory holdings. By investing in costly backupcapacity (such as water tanks and electricity generators), firms mitigate the impact of infrastructure disruptions. Thestudy estimates that only 13 percent of firms receive government support in the aftermath of floods.

Suggested Citation

  • Maruyama Rentschler,Jun Erik & Kim,Ella Jisun & Thies,Stephan Fabian & De Vries Robbe,Sophie Anne & Erman,Alvina Elisabeth & Hallegatte,Stephane, 2021. "Floods and Their Impacts on Firms : Evidence from Tanzania," Policy Research Working Paper Series 9774, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9774
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    References listed on IDEAS

    as
    1. Erman,Alvina Elisabeth & Tariverdi,Mersedeh & Obolensky,Marguerite Anne Beatrice & Chen,Xiaomeng & Vincent,Rose Camille & Malgioglio,Silvia & Maruyama Rentschler,Jun Erik & Hallegatte,Stephane & Yoshi, 2019. "Wading Out the Storm: The Role of Poverty in Exposure, Vulnerability and Resilience to Floods in Dar Es Salaam," Policy Research Working Paper Series 8976, The World Bank.
    2. Yasuyuki Todo & Kentaro Nakajima & Petr Matous, 2015. "How Do Supply Chain Networks Affect The Resilience Of Firms To Natural Disasters? Evidence From The Great East Japan Earthquake," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 209-229, March.
    3. Yasuhide Okuyama & Geoffrey J. D. Hewings & Michael Sonis, 2004. "Measuring Economic Impacts of Disasters: Interregional Input-Output Analysis Using Sequential Interindustry Model," Advances in Spatial Science, in: Yasuhide Okuyama & Stephanie E. Chang (ed.), Modeling Spatial and Economic Impacts of Disasters, chapter 5, pages 77-101, Springer.
    4. Stephane Hallegatte, 2019. "Disasters’ impacts on supply chains," Nature Sustainability, Nature, vol. 2(9), pages 791-792, September.
    5. Yuzuka KASHIWAGI & Yasuyuki TODO, 2019. "Propagation of Positive Effects of Post-disaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake," Discussion papers 19030, Research Institute of Economy, Trade and Industry (RIETI).
    6. Kousky, Carolyn, 2014. "Informing climate adaptation: A review of the economic costs of natural disasters," Energy Economics, Elsevier, vol. 46(C), pages 576-592.
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    Citations

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    Cited by:

    1. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03908250, HAL.
    2. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Working Papers halshs-03908250, HAL.
    3. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Documents de travail du Centre d'Economie de la Sorbonne 22024r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Sep 2023.
    4. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Post-Print halshs-03908250, HAL.
    5. Grover,Arti Goswami & Kahn,Matthew Edwin, 2024. "Firm Adaptation to Climate Risk in the Developing World," Policy Research Working Paper Series 10797, The World Bank.
    6. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Documents de travail du Centre d'Economie de la Sorbonne 22024, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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    Keywords

    Natural Disasters; Transport Services; Hydrology; Hazard Risk Management; Social Risk Management; Disaster Management; Energy Policies & Economics;
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