Tropical cyclones and its impact on firms/schools - evidence from coastal India

Abstract

Tropical cyclones have long posed significant threats to life, property, and livelihoods in coastal regions. While substantial research has explored their effects on agriculture and infrastructure, there remains a notable gap in understanding how such climatic shocks affect economic and educational institutions. This study addresses that gap by evaluating the impact of cyclone exposure on firms and schools in coastal India using a panel-data empirical strategy. We begin by constructing a district-level cyclone exposure index using best-track data from the NOAA IBTrACS archive, incorporating wind speeds and geographic proximity to cyclone paths. These indices are then merged with firm and school datasets—such as CMIE Prowess, UDISE+, MSME, and DICE—to analyze outcomes including revenue, employment, enrollment, and attendance. Our methodology adopts fixed effects panel regression to control for unobserved heterogeneity, while also proposing robustness checks with alternative wind thresholds and spatial buffers. Preliminary descriptive analyses suggest significant variation in exposure across districts and a potential negative association with operational continuity in firms and student attendance in schools. Although the econometric analysis is ongoing, the study outlines clear hypotheses and identification strategies to estimate causal effects. The research holds direct policy relevance by informing disaster response planning, the development of targeted insurance schemes, and the deployment of early warning systems in cyclone-prone regions. Ultimately, this study not only broadens the scope of climate impact assessments beyond agriculture but also sets the stage for predictive risk mapping and institutional resilience planning in the context of accelerating climate change.