Investments under Risk: Evidence from Hurricane Strikes

How do companies respond when hurricanes hit their operations? This study shows that after major hurricane strikes, firms shift capital investment away from affected areas toward safer regions—especially after 1997, when climate risk became more salient. Rather than rebuilding in high-risk zones, many businesses reallocate resources, reduce new plant formation, and ultimately reshape their geographic footprint in response to climate-driven threats. The findings suggest natural disasters are not just disruptive—they’re directional in how they influence long-term business strategy.