From disastrous heat waves to extreme rains: effects of weather shocks on entrepreneurship

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

Research output: Contribution to journalArticleResearchpeer-review

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.

Original languageEnglish
Article numbere00469
Number of pages14
JournalJournal of Business Venturing Insights
Volume21
DOIs
Publication statusPublished - Jun 2024

Keywords

  • Entrepreneurship
  • Rainfall
  • Self-employment
  • Shocks
  • Temperature
  • Weather

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