Maria I. Marshall

Small-business demise and recovery after Katrina: rate of survival and demise

Post-disaster research is often plagued by displacement of subjects, loss of infrastructure, and the disruption of communication. Economic losses and business disruptions caused by a disaster tend to affect small businesses on a greater scale. With the majority of small businesses being operated out of a home, the inability to recover affects both economic and overall well-being of the business and the family. Specifically for small businesses, post-disaster research is important because it leads to increased preparedness and survival strategies for the sector and reduced economic vulnerabilities in owner-controlled areas. Historically, most of what is known about preparation, response, and recovery of small businesses from natural disasters is based on businesses that have recovered. However, there exists a need for understanding recovery also from the perspective of those that tried, but failed to recover. Grounded in a pragmatic approach, this study presents a methodology for tracking demised small businesses after Hurricane Katrina. Supported by empirical evidence, solutions to the problems of timing, generalizability, and access are presented, providing a systematic methodology for successfully studying small businesses after a disaster event. Rate of survival and demise data are presented, providing more useful numbers than prior estimates. Locating demised and recovered small businesses efficiently is the first step in understanding how business owners prepare, react, adjust, and strive to recover from disaster-driven events. A solution to this challenging issue of access makes the study of demised small businesses possible.

Small business disaster recovery: a research framework

Exogenous, non-normative shocks to small businesses such as natural disasters have been understudied. Moreover, most disaster research on small businesses has focused on business recovery as a dichotomy at one point in time. However, disaster recovery for small businesses is an iterative process set in the context of individual, family/household, and community recovery over time. A new dynamic research framework for small business recovery is proposed which allows for a shared framework and vocabulary.

Fresh-Cut Melon—The Money Is in the Juice

Fruit is an important component of the food industry in the United States, and “fresh-cut” products are an increasing portion of that consumption. We found that packaging and juice content played a significant role in the choices Indiana consumers made when purchasing fresh-cut melon products. Brand was not as important as the other fresh-cut melon attributes. Indiana consumers had a clear dislike for cup-shaped transparent packages compared with tamper-proof, bowl, and squared packages. However, they were willing to pay a premium for packages that have no fruit juices on the bottom.

Predicting small business demise after a natural disaster: an analysis of pre-existing conditions

Few studies of small businesses have addressed demise in post-disaster environments, and the factors that lead to business demise after natural disasters are not well understood. This study explored demise by interviewing a random sample of small business owners whose businesses survived or met demise following Hurricane Katrina. The goal of this study was to determine whether businesses that met demise could be predicted based on pre-existing characteristics of those businesses and their owners. Findings indicated that businesses owned by women, minorities, and veterans were more likely to meet demise. Owners with more industry experience and older businesses were less likely to meet demise, along with larger businesses (number of employees) and service-based businesses. Businesses that had prior disaster experience and prior cash flow problems were also less likely to meet demise post-Katrina, suggesting that prior experiences with some type of adversity may provide knowledge and insight that aid small business owners during subsequent experiences during disaster preparation, response, and recovery periods. Home-based businesses were also less likely to meet demise, whereas businesses located in coastal counties were more likely to meet demise.

Analysis of post-disaster damage and disruptive impacts on the operating status of small businesses after Hurricane Katrina

When small businesses are impacted by natural hazard events, hazard and sociological researchers may have access to collect data from a sample of open businesses, in hopes of distilling lessons that might help reduce vulnerability to future disasters. Lessons from demised businesses might be more useful in reducing business closure for increasing business sustainability to disasters. Using interviews from a random sample of 371 open and 126 closed businesses’ experiences with Hurricane Katrina, discrete choice methods examine the relationship between the impact of post-disaster damage, loss of lifelines, types of delays in reopening, and cascading damages on business continuity. This unique sample offers the opportunity to determine whether damage to operating businesses was different than that of demised businesses. Respondents provided pre-Katrina data up through the last interviews in 2013. Results demonstrate that damage may have a short-term effect on operating status; it was associated with immediate demise but had much less effect on longer-term recovery. Additionally, it is evident that there is one path to failure. Businesses that did reopen, but later closed, may have been impacted by a cascade of both exogenous and endogenous shocks.

Lump sum versus annuity: choices of Kentucky farmers during the tobacco buyout program.

Our study uses the data collected during the implementation of the tobacco buyout program in Kentucky to evaluate how rural households, diverse in income, age, family structure, location, education level, and other characteristics, made a choice between annuities and a lump-sum payment. Subjects in our field experiment did not have to retire or change their employment, as did subjects in many field studies of the choice between annuities and lump-sum payments, which allowed us to evaluate the relationship between the option choice and a decision whether to exit the tobacco market. Our results suggest that while discounted utility theory gives acceptable predictions of the farmers’ behavior, other factors have to be taken into consideration. First, there are consistent biases that describe individual intertemporal behavior, such as availability bias or acquiescence bias. Second, there is a certain degree of heterogeneity in individual intertemporal preferences that correlates with their personal characteristics, such as education and production status. Third, our analysis revealed that the decision to exit the tobacco market positively correlated with the decision to take a lump-sum payment.

The Demand for Post‐Katrina Disaster Aid: SBA Disaster Loans and Small Businesses in Mississippi

Following Hurricane Katrina, the United States government provided billions of dollars in loans to repair the damage caused by the hurricane. However, the specifics surrounding demand for these loans and the process of application and approval for Small Business Administration (SBA) loans have yet to be fully examined. We analyse the demand of small businesses for such loans and delve into the factors which are associated with success in obtaining loan funds following disaster. Results indicate several factors are important in all of the stages of the loan process: the income of the business, whether the business had insurance or received money in an insurance claim and the gender of the business owner.

Women’s management practices and performance in rural female-owned family businesses

Purpose Prior research indicates that family businesses have fewer management control practices in place and are more likely to have non-economic goals for their firm. Further, researchers in this domain contend that female-controlled businesses tend to underperform compared to male-controlled businesses. The purpose of this paper is to analyze the performance effects of management controls and goals for the business across both male and female-controlled farm and rural family businesses. Design/methodology/approach The data used in the analyses are from the 2012 Intergenerational Farm and Non-Farm Family Business Survey. The sample comprises 576 small- and medium-sized rural family businesses. The authors used probit analysis to model both family business objective and subjective success for women and men. Findings The results suggest that female-controlled farm and rural family businesses do not underperform their male counterparts in terms of objective or subjective assessments of performance. The results do indicate, however, that strategic management via management control practices within the firm influence objective and subjective performance differently across male and female-controlled farm and rural family businesses. Originality/value The results provide three primary contributions to the family business literature. First, the authors determined that strategic management practices via management control mechanisms, as well as the monitoring of managers, are of significance to the objective performance (i.e. gross income) of both men and women-controlled farm and rural family businesses. Second, the authors found that communicating economic vs non-economic goals do not influence satisfaction with the firm’s performance, but do influence the probability of success for female-controlled family businesses. Finally, the authors find that when we compare male and female-controlled businesses in the same industry, while controlling for family and business factors, men and women do not differ in a statistical sense in objective or subjective performance.

What Did They Do with the Money? An Analysis of Tobacco Buyout Recipients’ Expenditure Choices

There are many expenditure options available to farmers who received a tobacco buyout check. A multinomial probit model is used to analyze how farmer, business, and household characteristics influence the choice of expenditure option. Results of the study show that farmers tend to use the tobacco buyout payments as a special income account which they spend in a focused manner, and their expenditure choices vary by gender and by age groups. Findings also reveal that farmers who plan to stay in tobacco production are more likely to invest in new or existing on-farm activities.

Personal Discount Rates: Evidence from the Tobacco Buyout Program

The tobacco buyout program affected a number of southern states, including Kentucky, providing a unique opportunity to study how individuals actually make choices involving large sums of money. This natural experiment, allowed us to measure the personal discount rates for Kentucky tobacco farmers, who are heterogeneous in terms of age, education, income, and other economic and non-economic factors. Results of our analysis suggest that personal characteristics, such as confidence, experienced interruptions in the regular family routine, defensive avoidance and attitude toward various sources of information, not an individuals demographic profile, influence the personal discount rate.