Impact of extratropical cyclones, floods, and wildfires on firms' financial performance in New Zealand

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.