Natural disasters and firms in Vietnam

Abstract

This paper investigates the consequences of natural disasters on firms in Vietnam over the period 2000 to 2008. We examine the impacts of natural disasters on firm investment and retail sales. We find evidence of adverse effects of disasters on retail sales accompanied by an increase in firm investment of very similar magnitude. There are important differences across geographical units, with the positive impact on investment unique to large cities and provinces with large urban concentrations. We find that more remote rural areas, especially in the North, experience declines in sales without the mitigating boost to investment in disasters’ aftermath. We also show that the decline in sales is not apparently associated with declines in household incomes.