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Natural Disasters and Firm Resilience in Italian Industrial Districts

In: Agglomeration and Firm Performance

Author

Listed:
  • Giulio Cainelli

    (University of Padova)

  • Andrea Fracasso

    (University of Trento)

  • Giuseppe Vittucci Marzetti

    (University of Milano-Bicocca)

Abstract

We carry out a firm-level empirical analysis to evaluate the economic impact of the sequence of earthquakes that occurred in 2012 in the Italian region of Emilia-Romagna and to address the question of whether the localization of a firm within an industrial district mitigated or exacerbated this impact. We estimate the effect of the earthquake on firms’ performance via two alternative methods: Difference-in-differences and propensity score matching in levels and first-differences. Our findings suggest that the earthquake reduced turnover, production, value added, and return on sales of the surviving firms, at least in the short term. In addition, the debt over sales ratio grew significantly more in the firms located in the areas affected by the earthquake. The empirical evidence also suggests that the negative impact of the earthquake was slightly higher for the firms located in industrial districts, thereby suggesting that, at least in the short term, the usually positive cumulative processes associated with localization within an agglomerated area could have reversed and magnified the negative impact of a disruptive exogenous supply shock.

Suggested Citation

  • Giulio Cainelli & Andrea Fracasso & Giuseppe Vittucci Marzetti, 2018. "Natural Disasters and Firm Resilience in Italian Industrial Districts," Advances in Spatial Science, in: Fiorenza Belussi & Jose-Luis Hervas-Oliver (ed.), Agglomeration and Firm Performance, pages 223-243, Springer.
    • Handle: RePEc:spr:adspcp:978-3-319-90575-4_13
    DOI: 10.1007/978-3-319-90575-4_13
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    Cited by:

    1. Hayato Kato & Toshihiro Okubo, 2022. "The Resilience of FDI to Natural Disasters Through Industrial Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(1), pages 177-225, May.
    2. Jack Clampit & Dinesh Hasija & Michael Dugan & John Gamble, 2021. "The Effect of Risk, R&D Intensity, Liquidity, and Inventory on Firm Performance during COVID-19: Evidence from US Manufacturing Industry," JRFM, MDPI, vol. 14(10), pages 1-16, October.

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