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Impact of cyclones on manufacturing firms in India

Published online by Cambridge University Press:  09 January 2025

Bishwanath Goldar Open the ORCID record for Bishwanath Goldar [Opens in a new window] ,
Amrita Goldar ,
Yashobanta Parida Open the ORCID record for Yashobanta Parida [Opens in a new window]  and
Atul Saini
Bishwanath Goldar*
Affiliation:
Institute of Economic Growth, Delhi, India
Amrita Goldar
Affiliation:
Indian Council for Research on International Economic Relations, New Delhi, India
Yashobanta Parida
Affiliation:
Department of Economics, FLAME University, Lavale, Pune, India
Atul Saini
Affiliation:
Department of Geography, Hemvati Nandan Bahuguna Garhwal University, Pauri Garhwal, Uttarakhand, India
*
Corresponding author: Bishwanath Goldar; Email: b_goldar77@yahoo.com
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Abstract

The impact of cyclones on assets and sales of manufacturing firms in India is examined econometrically using data on manufacturing companies for 2008–2019. We find that there is about a 4–6 per cent dip in sales and a 2–3 per cent dip in total assets of manufacturing firms following a cyclone incident in the district where the firms' plants are located. The fall in sales is bigger for relatively small-sized firms. For multi-plant firms with plants in different states, which are relatively bigger firms, the impact may be small or even negligible. By contrast, cyclones cause a fall in total assets for both big and small firms. The adverse effect of cyclones on sales and assets of manufacturing firms is relatively less for firms with a high trade-technology orientation. We also find that cyclones significantly raise the risk of business failure among manufacturing plants, more so among small plants.

Keywords

impact of cyclonesbusiness failuremanufacturing firmsIndia

JEL classification

Q54: Climate • Natural Disasters and Their Management • Global Warming O14: Industrialization • Manufacturing and Service Industries • Choice of Technology G33: Bankruptcy • Liquidation L60: General
Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 21
Copyright
Copyright © The Author(s), 2025. Published by Cambridge University Press

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