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Title: Firms’ Management of Infrequent Shocks
Authors: Benjamin, Collier
Andrew, Haughwort
Howard, Kunreuther
Erwann, Michel-Kerjan
Michael, Stewart
Keywords: Flood Control-Disaster risk reduction funding, विपद जोखिम न्यूनिकरणमा आर्थिक सहायता, financiamiento para la Gestión del Riesgo de Desastre
Issue Date: Apr-2017
Publisher: Wharton
Abstract: We examine businesses’ financial management of a rare, severe event using detailed firm-level data collected following Hurricane Sandy in the New York area. Credit played a prominent role in financing recovery; more negatively affected firms took on debt because of Sandy (38%) than received insurance payments (15%) in our data. Negatively affected firms were often credit constrained after the shock. While firms’ demand for insurance is often explained by financing frictions, we find that the most credit constrained firms after the event, younger firms and smaller firms, were the least likely to insure before it.
Appears in Collections:Assets and Livelihoods

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