Predicting Long-Term Business Recovery from Disaster: A Comparison of the Loma Prieta Earthquake and Hurricane Andrew

This paper examines long-term recovery outcomes for businesses impacted by major natural disasters. Data were collected via two large-scale mail surveys–one administered to Santa Cruz County, California businesses eight years after the Loma Prieta earthquake and one administered to businesses in South Dade County, Florida, six years after Hurricane Andrew. Based on the results of OLS regression models, we argue that long-term recovery experiences of businesses are affected by various firm characteristics, including the economic sector in which a business operates, its age and financial condition, and the scope of its primary market; direct and indirect disaster impacts including physical damage, forced closure, and disruption of operations; and owner perceptions of the broader economic climate. Previous disaster experience, level of disaster preparedness, and use of external sources of aid were not found to significantly affect the long-term economic viability of businesses in the two study communities.