Abstract
The purpose of the research is to empirically investigate the impact of extratropical cyclones, floods, and wildfires on the profitability of firms operating in New Zealand. We utilize a comprehensive administrative database of all firms from Statistics New Zealand’s Longitudinal Business Database from the financial year 2011–2020 for extratropical cyclones and 2001–2020 for floods and wildfires. A set of panel regressions with the firm- and time-fixed effects has been estimated to assess the impact of extratropical cyclones, floods, and wildfires on firms’ profit and business equity. We find that the annual profit of extratropical cyclones-affected firms in agriculture, wholesale trade, financial and insurance services, and transportation sectors decreased significantly compared with the unaffected firms in the cyclone year. The study findings also indicate that floods had no significant effect on the firm’s profit, and wildfires had no significant impact on the forestry firms’ profit. Besides, we found no substantial evidence of the impact of extratropical cyclones, floods, and wildfires on the firms’ business equity.
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Data availability statement
The data that support the findings of this study are not openly available because Statistics New Zealand has provided the data used in this study under conditions designed to give effect to the security and confidentiality provisions of the Statistics Act 1975.
Notes
See Fabling and Sanderson (2016), pp. 16–19, for discussion on purpose, content, and coverage of AES.
An economically-significant enterprise is defined as an enterprise if it fulfils any one of the following conditions: has greater than $30,000 annual Goods and Services Tax (GST) expenses or sales; has more than 3 paid employees; is in a GST exempt industry, other than residential property leasing and rental; is part of a Business Register (BR) group; is a new GST registration and has registered for Salaries and Wages PAYE; is a new GST registration and is part of a IRD GST group return; has a geographic unit classified to agriculture, it is alive on the BR, it is classified as economically significant; has IR10 income greater than $40,000 annually.
A stratified random sample is selected to receive the annual postal survey from all active business. The details of the sampling procedure are available at: https://datainfoplus.stats.govt.nz/Item/nz.govt.stats/36809771-984d-4e6b-89a1-576f2118b05b.
A meshblock is the smallest geographic unit for which statistical data is collected and processed by Statistics New Zealand.
Available for download at https://data.mfe.govt.nz/layer/52375-lucas-nz-land-use-map-1990-2008-2012-2016-v008/.
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Appendix
Appendix
See Tables 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94 and 95.
See Figs. 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14.
Extratropical cyclone affected firm location at meshblocks level
Impact of extratropical cyclones on firms’ business equity (absolute coefficient). The figures indicate the point estimates of the impact of extratropical cyclones (occurred during FY2018) on firms’ business equity by using the specification in Eq. (1). Regression coefficients are expressed as New Zealand Dollars in thousands. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Impact of extratropical cyclones on firms’ business equity (standardized coefficient). The figures indicate the point estimates of the impact of extratropical cyclones (occurred during FY2018) on firms’ business equity by using the specification in Eq. (1). Regression coefficients are expressed as standardized coefficients. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Flood-affected meshblocks in New Zealand
Impact of floods on firms’ profit (absolute coefficient). The figures indicate the point estimates of the impact floods on firms’ profit by using the specification in Eq. (2). Regression coefficients are expressed as New Zealand Dollars in thousands. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Impact of floods on firms’ profit (standardized coefficient). The figures indicate the point estimates of the impact of floods on firms’ profit by using the specification in Eq. (2). Regression coefficients are expressed as standardized coefficients. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Impact of floods on firms’ business equity (absolute coefficient). The figures indicate the point estimates of the impact floods on firms’ business equity by using the specification in Eq. (2). Regression coefficients are expressed as New Zealand Dollars in thousands. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Impact of floods on firms’ business equity (standardized coefficient). The figures indicate the point estimates of the impact of floods on firms’ business equity by using the specification in Eq. (2). Regression coefficients are expressed as standardized coefficients. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Wildfire-affected meshblocks in New Zealand
Wildfires and forestry firms’ profit and business equity (absolute coefficient). The figures indicate the point estimates of the impact of wildfires on forestry firms’ profit and business equity by using the specification in Eq. (3). Regression coefficients are expressed as New Zealand Dollars in thousands. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
Wildfires and forestry firms’ profit and business equity (standardized coefficients). The figures indicate the point estimates of the impact of wildfires on forestry firms’ profit and business equity by using the specification in Eq. (3). Regression coefficients are expressed as standardized coefficients. Each regression is adjusted for firm and year-fixed effects. Robust standard errors adjusted for clustering at the firm level. 95% confidence intervals are shown for each point estimate
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Roy, A., Noy, I. Impact of extratropical cyclones, floods, and wildfires on firms’ financial performance in New Zealand. Environ Econ Policy Stud 25, 493–574 (2023). https://doi.org/10.1007/s10018-023-00369-x
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DOI: https://doi.org/10.1007/s10018-023-00369-x