Natural events and performance of micro firms: the impact of floods on shops in Uganda
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The impact of natural events on local economy is a key issue on the agenda of policymakers around the world and particularly in developing countries. This paper discusses the impact of floods on micro businesses development. We provide evidence on how the frequency of events is correlated with shops business performance in Uganda. We exploit a unique dataset from a direct survey on micro retail shops within a project launched by the Ministry of Lands Housing and Urban Development. Data come from a survey on 13 cities and villages where floods occur regularly and are a major problem for population. After controlling for both shop manager and business characteristics, expectedly we find that floods impact negatively on business performance. However business performance is likely to decrease less when events occur with more frequency. This may indicate a sort of adaptation behaviour by shop managers when floods occur regularly. Also, the significance of shop manager’s individual characteristics suggests that policies for boosting micro business should improve human capital, with peculiar attention to women and young people. Our findings also suggest that encouraging some forms of network economies may positively impact business performance.
KeywordsMicro shops Floods Performance Resilience Uganda
JEL classificationO12 N17 L25 Q54
The data used in this research was surveyed during USMID programme launched by Ministry of Lands Housing and Urban Development of Uganda, and within the consultancy services for comprehensive planning of storm water drainage needs study and preparation of drainage master plans for 13 municipalities in Uganda. The authors, and in particular Giuseppe Tesoriere, would like to thank the staff of both the Ministry of Lands Housing and Urban Development and USMID in Kampala, as well as Town clerks and Municipal officials of the cities involved in the surveys, and Mr. Sergio di Maio, Mr. Gaetano Beninati and Ms. Patricia Mugala for their kind support.
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