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Natural disasters, entrepreneurship activity, and the moderating role of country governance

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  • Christopher J. Boudreaux

    (Florida Atlantic University)

  • Anand Jha

    (Wayne State University)

  • Monica Escaleras

    (Florida Atlantic University)

Abstract

The purpose of this paper is to investigate if a country’s quality of governance moderates the effect of natural disasters on start-up activity within that country. We test our hypotheses using a panel of 95 countries from 2006 to 2016. Our findings suggest natural disasters discourage start-up activity in countries with low-quality governance but encourage start-up activity in countries with high-quality governance. Moreover, our estimates reveal natural disasters’ effects on start-up activity persist for the short term (1–3 years) but not the long term. Our findings provide new insights into how natural disasters affect entrepreneurship activity and highlight the importance of country governance during these events.

Suggested Citation

  • Christopher J. Boudreaux & Anand Jha & Monica Escaleras, 2023. "Natural disasters, entrepreneurship activity, and the moderating role of country governance," Small Business Economics, Springer, vol. 60(4), pages 1483-1508, April.
    • Handle: RePEc:kap:sbusec:v:60:y:2023:i:4:d:10.1007_s11187-022-00657-y
    DOI: 10.1007/s11187-022-00657-y
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    More about this item

    Keywords

    Country governance; Entrepreneurship; Institutions; Natural disasters; Start-ups;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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