How does the weather and climate change affect firm performance in low-income countries? Evidence from Uganda

This study examines the impacts of weather and climate shocks on firm performance in Uganda, a low-income country that shares many characteristics with countries at similar levels of development. The analysis exploits panel methods on novel quarterly business climate data. The results are threefold. First, weather and climate shocks are negatively associated with business performance. Second, these effects are stronger among micro and small enterprises, and among firms in the agricultural and industrial sectors. Third, poor business environments characterized by excruciating constraints exacerbate the impact of climate shocks on business performance. The results are robust to alternative econometric model specifications.