Enterprise Recovery Following Natural Disasters

Using data from surveys of enterprises in Sri Lanka after the December 2004 tsunami, the authors undertake the first microeconomic study of the recovery of the private firms in a developing country following a major natural disaster. Disaster recovery in low-income countries is characterized by the prevalence of relief aid rather than of insurance payments; the data show this distinction has important consequences. The data indicate that aid provided directly to households correlates reasonably well with reported losses of household assets, but is uncorrelated with reported losses of business assets. Business recovery is found to be slower than commonly assumed, with disaster-affected enterprises lagging behind unaffected comparable firms more than three years after the disaster. Using data from random cash grants provided by the project, the paper shows that direct aid is more important in the recovery of enterprises operating in the retail sector than for those operating in the manufacturing and service sectors.

Bibliographic Details

Main Authors:	de Mel, Suresh, McKenzie, David, Woodruff, Christopher
Language:	English
Published:	2010-04-01
Subjects:	ACCESS TO CAPITAL, ACCOUNTING, BANKS, BENEFICIARIES, CAPITAL STOCK, CAPITAL STOCKS, CATASTROPHIC EVENTS, CLIMATE CHANGE, CONSUMER PRICE INDEX, DAMAGES, DAT DATABASE, DEATH TOLL, DEVASTATION, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT BANK, DISASTER MANAGEMENT, DISASTER RECOVERY, DISASTER RELIEF, DROUGHTS, DURABLES, EARTHQUAKE, EARTHQUAKES, ECONOMIC CONDITIONS, ECONOMIC DEVELOPMENT, EFFECTS OF HURRICANE, EMERGENCIES, EMERGING MARKETS, EMPLOYMENT, ENTREPRENEURS, EQUIPMENT, EXPANSION, EXPENDITURE, EXPENDITURES, FINANCIAL FLOWS, FINANCIAL INSTITUTIONS, FINANCIAL SUPPORT, FIRMS, FLOODING, FLOODS, FOOD AID, FORGIVENESS, FORMAL LOANS, GOVERNMENT BANK, HOUSEHOLD BARGAINING, HOUSING, HUMAN CAPITAL, HURRICANE, HURRICANES, INCOME LEVELS, INFLATION, INSURANCE, INSURANCE MARKET, INSURANCE MARKETS, INTERNATIONAL BANK, INTERNATIONAL FINANCIAL INSTITUTIONS, INVENTORIES, LABOR HOURS, LIQUID ASSETS, LOAN, LOANS FROM FAMILY, LOCAL ECONOMY, MACROECONOMICS, MANUFACTURER, MANUFACTURERS, MARKET FAILURES, MICRO ENTERPRISES, MICROENTERPRISES, MICROFINANCE, MICROFINANCE ORGANIZATIONS, MICROFINANCE PRACTITIONERS, MICROFINANCE PROGRAM, MONEYLENDERS, NATURAL DISASTER, NATURAL DISASTERS, NATURAL PHENOMENA, NEGATIVE SHOCKS, OPPORTUNITY COST, OUTSTANDING LOANS, PERSONAL SAVINGS, PRIVATE BANK, PRIVATE ENTERPRISES, PROFITABILITY, RECONSTRUCTION, RELIEF AGENCIES, REMITTANCES, RETURN, RETURNS, SAFETY, SAFETY NET, SAVINGS, SCALE ENTERPRISES, SHOPS, SMALL BUSINESS, SMALL BUSINESSES, SMALL ENTERPRISES, SMALL FIRMS, SMALL SCALE ENTERPRISE, SMALL SCALE ENTERPRISES, SME, SOCIAL NETWORKS, SUPPLIER, SUPPLIERS, TRADING, TRANSITION ECONOMIES, TRUST FUND, TSUNAMI, TSUNAMI RECOVERY, TSUNAMIS, VICTIMS, WAGES, WORKING CAPITAL, WRITTEN RECORDS, Microdata Set,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100413103243 https://hdl.handle.net/10986/3756
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