From disastrous heat waves to extreme rains

Effects of weather shocks on entrepreneurship

authored by

Sefa Awaworyi Churchill, Musharavati Ephraim Munyanyi, Trong Anh Trinh, Johan Wiklund

Abstract

Using household panel data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and satellite re-analysis temperature and rainfall data, we present the first study to examine the impact of weather shocks on entrepreneurship. We measure temperature and rainfall shocks at the postcode level, and find that an increase in weather shocks in the previous period is associated with a decline in the probability of self-employment in the next period. We find suggestive evidence that health, cognitive functioning and economic activity are mechanisms through which temperature shocks transmit to entrepreneurship. The key insight of this study is that it is less likely that those directly affected by climate events will act entrepreneurially, at least in the short run.

Organisation(s)

Institute of Environmental Economics and World Trade

External Organisation(s)

Royal Melbourne Institute of Technology University
Monash University
Syracuse University

Type

Article

Journal

Journal of Business Venturing Insights

Volume

21

No. of pages

14

Publication date

06.2024

Publication status

Published

Peer reviewed

Yes

ASJC Scopus subject areas

Business and International Management, Management of Technology and Innovation

Electronic version(s)

https://doi.org/10.1016/j.jbvi.2024.e00469 (Access: Open)