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The Impact of Floods on Firm Performance and Relocation

Author

Listed:
  • Nicoletta Berardi
  • Paul Vertier
  • Chloé Zapha
  • Elie Malhaire
  • Jules Tapin

Abstract

This paper investigates the effects of floods on firms, combining their financial information and exact location with administrative data on floods at the municipality level between 2004 and 2024 in France. For firms located in municipalities hit by a flood, both survival rates and sales deteriorate: their chances of survival drop by 2%, and their sales by 8%, for up to five years after the event. Moreover, these firms are more likely to relocate to safer areas in other municipalities. These effects are driven by intense floods, lasting at least one week. We find evidence of both direct and indirect effects: firms in 1-in-100 years floodplain are more affected than others, but even floods occurring in neighboring municipalities decrease firms’ economic performance, with magnitudes attenuating as distance increases.

Suggested Citation

  • Nicoletta Berardi & Paul Vertier & Chloé Zapha & Elie Malhaire & Jules Tapin, 2026. "The Impact of Floods on Firm Performance and Relocation," Working papers 1047, Banque de France.
    • Handle: RePEc:bfr:banfra:1047
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    Keywords

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    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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