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 Hsu¹; Hsiao-Hui Lee¹; Shu-Cing Peng²; Long Yi³

¹ University of Hong Kong and National Tsing Hua University · ² National Taiwan University · ³ Hong Kong Baptist University

The Review of Economics and Statistics 2018

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.

DOI: 10.1162/rest_a_00738
Volume: 100 (4)
Pages: 619-630
Language: en
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