Hanna Berkel, University of Copenhagen
"Cash grants and firm recovery: An RCT following cyclone Idai in Mozambique"
In March 2019, cyclone Idai hit central Mozambique and damaged, among others, businesses. We conducted a randomized controlled trial (RCT) to estimate the impact of unconditional cash grants on micro enterprises and their recovery. We find that, on average, the cash grants had a positive effect on firm revenue, profit and savings, as well as the likelihood to have their roof repaired. More importantly, the cash had a stronger impact in the more damaged city (Beira) compared to the less affected location (Chimoio), and was particularly effective for carpenters and smiths. These findings confirm previous research by de Mel et al. (2012) who show that access to finance can enhance firm recovery in the aftermath of an extreme weather event.
(Joint with Peter Fisker and Finn Tarp)