The Impact of Storms on Firm Survival: A Bayesian Spatial Econometric Model for Firm Survival

This paper investigates the impact of the storms Katrina and Rita on firm survival in the Orleans Parish. In particular, a Bayesian spatial probit model is used to assess the impact of a number of firm characteristics on firm survival. The results reveal that larger firms and those with less flooding are more likely to survive. Larger chain stores were less likely to return to the city than sole proprietorships. Spatial results also reveal a very strong spatial component to firm survival just after the storm which diminishes as time passed.