The Effect of Natural Disaster on Regional Economic Growth: Evidence from an Earthquake in İzmir/Türkiye

Abstract

This study examines the economic impact of the Aegean Sea Earthquake, which struck İzmir, Türkiye, on October 30, 2020, focusing on how it affected local businesses and financial resilience. Using a combination of survey data and regression analysis, the study investigates the operational disruptions experienced by companies of varied sizes and sectors. Findings show that while large firms displayed resilience, small businesses suffered significant operational and financial setbacks, prolonging the economic recovery process. The study also highlights the compounded effects of the COVID-19 pandemic, which intensified the challenges that companies faced. The results underscore the importance of developing robust crisis management strategies and fostering economic structures that are more resilient to both natural disasters and global crises. The study concludes with recommendations for policymakers and business leaders to enhance financial resilience to future shocks.

Keywords

• Natural disasters
• economic resilience
• earthquake
• COVID-19 pandemic
• regional economic development
• labor market
• employment
• labor demand

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