Church Membership and Economic Recovery: Evidence from the 2005 Hurricane Season
Iftekhar Hasan, Stefano Manfredonia, Felix Noth
Economic Journal,
im Erscheinen
Abstract
This paper investigates the critical role of church membership in the process of economic recovery after high-impact natural disasters. We document a significant adverse treatment effect of the 2005 hurricane season in the Southeastern United States on establishment-level productivity. However, we find that establishments in counties with higher rates of church membership saw a significantly stronger recovery in terms of productivity for 2005–10. We also show that church membership is correlated with post-disaster entrepreneurship activities and population growth.
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Drei Forschungscluster Forschungscluster "Wirtschaftliche Dynamik und Stabilität" Forschungsfragen Im Mittelpunkt der Forschung dieses Clusters steht die empirische Analyse von…
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Natural Disasters and Bank Stability: Evidence from the U.S. Financial System
Felix Noth, Ulrich Schüwer
Journal of Environmental Economics and Management,
May
2023
Abstract
We show that weather-related natural disasters in the United States significantly weaken the financial stability of banks with business activities in affected regions. This is reflected in higher probabilities of default, lower z-scores, higher non-performing assets ratios, higher foreclosure ratios, lower returns on assets and lower equity ratios of affected banks in the years following a natural disaster. The effects are economically relevant and highlight the financial vulnerability of banks and their borrowers despite insurances and public aid programs.
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Cultural Resilience, Religion, and Economic Recovery: Evidence from the 2005 Hurricane Season
Iftekhar Hasan, Stefano Manfredonia, Felix Noth
IWH Discussion Papers,
Nr. 9,
2021
Abstract
This paper investigates the critical role of religion in the economic recovery after high-impact natural disasters. Exploiting the 2005 hurricane season in the southeast United States, we document that establishments in counties with higher religious adherence rates saw a significantly stronger recovery in terms of productivity for 2005-2010. Our results further suggest that a particular religious denomination does not drive the effect. We observe that different aspects of religion, such as adherence, shared experiences from ancestors, and institutionalised features, all drive the effect on recovery. Our results matter since they underline the importance of cultural characteristics like religion during and after economic crises.
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Cultural Resilience and Economic Recovery: Evidence from Hurricane Katrina
Iftekhar Hasan, Stefano Manfredonia, Felix Noth
Abstract
This paper investigates the critical role of culture for economic recovery after natural disasters. Using Hurricane Katrina as our laboratory, we find a significant adverse treatment effect for plant-level productivity. However, local religious adherence and larger shares of ancestors with disaster experiences mutually mitigate this detrimental effect from the disaster. Religious adherence further dampens anxiety after Hurricane Katrina, which potentially spur economic recovery. We also detect this effect on the aggregate county level. More religious counties recover faster in terms of population, new establishments, and GDP.
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Lokaler Schock trifft lokale Bank: Die Folgen der Hochwasser des Jahres 2013 für das deutsche Finanzsystem
Benjamin Freudenstein, Michael Koetter, Felix Noth
Wirtschaft im Wandel,
Nr. 2,
2020
Abstract
Welche Auswirkungen makroökonomische Schocks in Form von Naturkatastrophen auf Banken haben und welche realwirtschaftlichen Implikationen sich daraus ergeben können, wurde unter dem Titel „Katrina und die Folgen: Sicherere Banken und positive Produktionseffekte“ bereits an früherer Stelle in der „Wirtschaft im Wandel“ dargestellt. Daran anknüpfend stellt dieser Artikel einen Forschungsbeitrag vor, der die Folgen der Hochwasser des Jahres 2013 in Deutschland für die Sparkassen und Genossenschaftsbanken und deren Unternehmenskunden untersucht. Im Mittelpunkt steht die Frage, ob lokale Banken die negativen Effekte des Hochwassers mildern, indem sie die Kreditvergabe an Unternehmen ausweiten. Der Befund ist erstens, dass Banken, die Beziehungen zu betroffenen Unternehmen haben, ihre Kreditvergabe um 3% relativ zu Banken ohne Beziehungen zu betroffenen Unternehmen ausweiten, und zweitens, dass bei Sparkassen mit Zugang zu nicht betroffenen regionalen Märkten keine signifikante Erhöhung des Kreditrisikos zu beobachten ist. Ein gegenüber regionalen Katastrophen widerstandsfähiges Finanzsystem sollte somit aus lokalen Banken bestehen, die gleichwohl überregional verbunden sind, damit ausreichende Möglichkeiten zur Diversifikation bestehen.
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Borrowers Under Water! Rare Disasters, Regional Banks, and Recovery Lending
Michael Koetter, Felix Noth, Oliver Rehbein
Journal of Financial Intermediation,
July
2020
Abstract
We show that local banks provide corporate recovery lending to firms affected by adverse regional macro shocks. Banks that reside in counties unaffected by the natural disaster that we specify as macro shock increase lending to firms inside affected counties by 3%. Firms domiciled in flooded counties, in turn, increase corporate borrowing by 16% if they are connected to banks in unaffected counties. We find no indication that recovery lending entails excessive risk-taking or rent-seeking. However, within the group of shock-exposed banks, those without access to geographically more diversified interbank markets exhibit more credit risk and less equity capital.
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Badly Hurt? Natural Disasters and Direct Firm Effects
Felix Noth, Oliver Rehbein
Finance Research Letters,
2019
Abstract
We investigate firm outcomes after a major flood in Germany in 2013. We robustly find that firms located in the disaster regions have significantly higher turnover, lower leverage, and higher cash in the period after 2013. We provide evidence that the effects stem from firms that already experienced a similar major disaster in 2002. Overall, our results document a positive net effect on firm performance in the direct aftermath of a natural disaster.
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How Do Banks React to Catastrophic Events? Evidence from Hurricane Katrina
Claudia Lambert, Felix Noth, Ulrich Schüwer
Review of Finance,
Nr. 1,
2019
Abstract
This paper explores how banks react to an exogenous shock caused by Hurricane Katrina in 2005, and how the structure of the banking system affects economic development following the shock. Independent banks based in the disaster areas increase their risk-based capital ratios after the hurricane, while those that are part of a bank holding company on average do not. The effect on independent banks mainly comes from the subgroup of highly capitalized banks. These independent and highly capitalized banks increase their holdings in government securities and reduce their total loan exposures to non-financial firms, while also increasing new lending to these firms. With regard to local economic development, affected counties with a relatively large share of independent banks and relatively high average bank capital ratios show higher economic growth than other affected counties following the catastrophic event.
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Taken by Storm: Business Financing and Survival in the Aftermath of Hurricane Katrina
Emek Basker, Javier Miranda
Journal of Economic Geography,
Nr. 6,
2018
Abstract
We use Hurricane Katrina’s damage to the Mississippi coast in 2005 as a natural experiment to study business survival in the aftermath of a capital-destruction shock. We find very low survival rates for businesses that incurred physical damage, particularly for small firms and less-productive establishments. Conditional on survival, larger and more-productive businesses that rebuilt their operations hired more workers than their smaller and less-productive counterparts. Auxiliary evidence from the Survey of Business Owners suggests that the differential size effect is tied to the presence of financial constraints, pointing to a socially inefficient level of exits and to distortions of allocative efficiency in response to this negative shock. Over time, the size advantage disappeared and market mechanisms seem to prevail.
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