Natural Disasters, Technology Diversity, and Operating Performance

Po Hsuan Hsu; Hsiao Hui Lee; Shu Cing Peng; Long Yi

doi:10.1162/rest_a_00738

Natural Disasters, Technology Diversity, and Operating Performance

Po Hsuan Hsu, Hsiao Hui Lee, Shu Cing Peng, Long Yi

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Abstract

In this paper, we empirically measure the impact of natural disasters on firm-level operating performance and examine if such impact can be mitigated by technology diversification. Using major natural disasters specified by Barrot and Sauvagnat (2015) and factory location data from the toxic release inventory (TRI) database, we first find that firms with factories located in states affected by natural disasters are much less profitable. Second, we find that firms with diversified technologies are significantly less subject to the impact of natural disasters, suggesting that technology diversity enhances firms' sustainability.

Original language	English
Pages (from-to)	619-630
Number of pages	12
Journal	Review of Economics and Statistics
Volume	100
Issue number	4
DOIs	https://doi.org/10.1162/rest_a_00738
Publication status	Published - 1 Oct 2018

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abstract = "In this paper, we empirically measure the impact of natural disasters on firm-level operating performance and examine if such impact can be mitigated by technology diversification. Using major natural disasters specified by Barrot and Sauvagnat (2015) and factory location data from the toxic release inventory (TRI) database, we first find that firms with factories located in states affected by natural disasters are much less profitable. Second, we find that firms with diversified technologies are significantly less subject to the impact of natural disasters, suggesting that technology diversity enhances firms' sustainability.",

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N2 - In this paper, we empirically measure the impact of natural disasters on firm-level operating performance and examine if such impact can be mitigated by technology diversification. Using major natural disasters specified by Barrot and Sauvagnat (2015) and factory location data from the toxic release inventory (TRI) database, we first find that firms with factories located in states affected by natural disasters are much less profitable. Second, we find that firms with diversified technologies are significantly less subject to the impact of natural disasters, suggesting that technology diversity enhances firms' sustainability.

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Natural Disasters, Technology Diversity, and Operating Performance

Abstract

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