Flood Events and Water Quality: Does Agricultural Land Use Matter?

Although existing studies have extensively investigated the impacts of floods and fertilizer intensity on water quality, the literature largely overlooks their interaction effects. These studies have usually focused on specific river basins, urban rivers, and catchments. Also, the strong persistence of water quality degradation has not been extensively quantified. In addition, flood exposure data from EM-DAT are subject to under-reporting of minor events, leading to missing observations in our flood series. We address this using a regression-based imputation approach and then estimate a dynamic panel model for 111 countries using two-step system GMM, which accounts for endogeneity, individual-specific heterogeneity, measurement error, and omitted variables. The results reveal that floods amplify water quality degradation; this degradation shows strong persistence; however, the interaction effect remains negative, suggesting that the marginal impact of floods on water quality varies with fertilizer intensity. The marginal effects reveal that countries with low (high) fertilizer use experience an increase (decrease) in water quality degradation following flood shocks. These findings emphasize that, beyond flood exposure and fertilizer intensity, their interaction should also be considered to ensure environmental sustainability.