Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283079 
Year of Publication: 
2022
Series/Report no.: 
JRC Working Papers in Economics and Finance No. 2022/13
Publisher: 
European Commission, Ispra
Abstract: 
Combining a rich database on natural hazards, granular flood risk maps and detailed information on firm geolocalisation, we study the dynamic impacts of floods on European manufacturing firms during the period 2007-2018. We find that water damages significantly and persistently worsen firm performance, and may endanger their survival. An average flood deteriorates total assets by about 2% in the year after the event, and up to 5% seven years out. The drop in sales and employment is comparable. We show how reallocation of economic activity within flooded regions can reconcile our results with the 'creative destruction' hypothesis proposed by the natural disaster literature.
Subjects: 
natural disasters
floods
climate risk
firm performance
panel local projections
JEL: 
D22
Q54
R11
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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