taken by storm: business survival in the aftermath of ......taken by storm: business survival in the...
TRANSCRIPT
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Taken by Storm: Business Survival in theAftermath of Hurricane Katrina∗
Emek Basker and Javier Miranda
Fifth Annual Microeconomics ConferenceFederal Trade Commission
November 2012
Disclaimer: The views expressed are those of the authors and not necessarily those of
the U.S. Census Bureau. All results have been reviewed to ensure that no confidential
information is disclosed.
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Sharkheads Souvenir Store, Biloxi, MS
Source: Monsterchef.net
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Which Businesses Survived the Storms?
I Damaged vs. undamaged
I Small firm vs. large firm
I Far from bank vs. near bank
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Which Businesses Survived the Storms?
I Damaged vs. undamaged
I Small firm vs. large firm
I Far from bank vs. near bank
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Which Businesses Survived the Storms?
I Damaged vs. undamaged
I Small firm vs. large firm
I Far from bank vs. near bank
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Which Businesses Survived the Storms?
I Damaged vs. undamaged
I Small firm vs. large firm
I Far from bank vs. near bank
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Which Businesses Survived the Storms?
I Damaged vs. undamaged
I Small firm vs. large firm
I Far from bank vs. near bank
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Data Sources
I Longitudinal Business Database (LBD)
I Geocoded all MS stores, restaurants, and hotels
I Federal Emergency Management Administration (FEMA)
I Economic Census
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Katrina Damage: Hancock & Harrison Counties, MS
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Mississippi Trends
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Exit Models
I Cross-sectional linear probability models
I Damage vector:I Limited/moderate damageI Extensive/catastrophic damage
I Firm size interacted with damage vector
I Additional controls: establishment age and employment,productivity, productivity×damage, 82 county FE, 110six-digit NAICS FE
I Three time periods:I 2004–06 (short run)I 2004–08 (long run)I 2002–04 (falsification exercise)
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Prob(Exit | Extensive or Catastrophic Damage)− Prob(Exit | No Damage)
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Bank Proximity
I Geocoded all MS banks, calculated distance to nearest bankor bank branch (LBD)
I Triple-difference regression: interact distance with damagevector, firm size, and damage×firm size
I Continue to control all other covariates
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Prob(Exit | Extensive or Catastrophic Damage,FirmSize=1) − Prob(Exit | No Damage, FirmSize=1)
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Counterfactual?
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Prob(Exit | Extensive or Catastrophic Damage,FirmSize=1) − Prob(Exit | No Damage, FirmSize=1)
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Summary
I Vulnerable establishments are more likely to exit immediatelyfollowing damage
I Establishments in small firms
I Establishments located far from banks
I Establishments in small firms located far from banks
I Evidence consistent with credit/resource constraints
I Credit?
I Insurance?
I Information?
I Skill?
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Summary
I Vulnerable establishments are more likely to exit immediatelyfollowing damage
I Establishments in small firms
I Establishments located far from banks
I Establishments in small firms located far from banks
I Evidence consistent with credit/resource constraints
I Credit?
I Insurance?
I Information?
I Skill?
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Sharkheads Souvenir Store, Biloxi, MS
Source: Sharkheads.com
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Thank you