Title: Natural Disasters and Long-Term Firm Performance: Evidence and Mechanism

Speaker: Qiannan Liu, Assistant Research Fellow at the School of Economics, Shandong University. Her research area is development economics. She has published papers in journals such as World Development, Financial Research, and World Economy, has won the 16th Shanghai Philosophy and Social Sciences Outstanding Achievement Award, and is the PI for the Youth Program of the Natural Science Foundation of Shandong Province, the 73rd General Program and the 17th Special Program of the China Postdoctoral Science Foundation. She has also participated in multiple projects of the National Natural Science Foundation of China.

Abstract: While the short-term effects of disasters on firm performance have been extensively studied, research on long-term effects is limited. Based on data from Chinese manufacturing firms, we exploit the quasi-random spatial and temporal nature of firm earthquake exposure to identify the short- and long-term effects of earthquakes. We find that, overall, earthquakes significantly increase firms’ output in the short run (within 3 years) but decrease it in the long run ($\ge 4$ years). Moreover, the effects differ between moderate and severe earthquakes, depending on whether destruction or reconstruction investment dominates the short-term impact. In the long run, earthquakes significantly reduce firms’ total factor productivity (TFP). We provide suggestive evidence that increased debt burden and decreased innovative capacity can serve as potential channels to explain the long-term decline in TFP.

Date & time: 20 March 2025, 12:15 - 13:15

Venue: B321, Zhixin Building, Central Campus, Shandong University