Predicting long-term business recovery from disaster: a comparison of the Loma Prieta earthquake and Hurricane Andrew1

Abstract

This paper examines long-term recovery outcomes of businesses impacted by major natural disasters. Data were collected via two large-scale mail surveys—one administered to Santa Cruz County, California businesses 8 years after the Loma Prieta earthquake and the other administered to businesses in South Dade County, Florida, 6 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 factors, 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.