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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Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
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Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
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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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Financing Choice and Local Economic Growth: Evidence from Brazil
Iftekhar Hasan, Thiago Christiano Silva, Benjamin Miranda Tabak
Journal of Economic Growth,
Nr. 3,
2021
Abstract
We study how financing non-traditional local activities, conceived here as a proxy for activity diversification, is associated with economic growth. We use municipality-level data from Brazil, a country with large geographical, social, and economic disparities observed across its more than 5500 municipalities. We find that finance to non-traditional local activities associates with higher municipal economic growth, suggesting a positive externality between the non-traditional and traditional sectors. Using large natural disasters in Brazil as sources of unexpected negative events, we find that this association between financing non-traditional local activities and economic growth becomes negative in times of distress. We find that traditional local sectors are more affected than non-traditional sectors following a natural disaster. Precisely because of the non-traditional sector’s dependence on the traditional sector, our results suggest that municipalities should restrengthen their traditional activities during adverse conditions.
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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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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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Flooded Through the Back Door: Firm-level Effects of Banks‘ Lending Shifts
Oliver Rehbein
IWH Discussion Papers,
Nr. 4,
2018
Abstract
I show that natural disasters transmit to firms in non-disaster areas via their banks. This spillover of non-financial shocks through the banking system is stronger for banks with less regulatory capital. Firms connected to a disaster-exposed bank with below median capital reduce their employment by 11% and their fixed assets by 20% compared to firms in the same region without such a bank during the 2013 flooding in Germany. Relationship banking and higher firm capital also mitigate the effects of such negative cross-regional spillovers.
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