Institution and decomposition of natural-disaster impact on growth

We investigated whether natural disasters enhance efficiency improvement, capital accumulation, and technological progress. Furthermore, we examined whether the influence of natural disasters depends on the legal origin. By using long-term panel data, this paper decomposes productivity growth measured by the growth of output per labor unit into three components: efficiency improvement, capital accumulation, and technological progress. After controlling for countries’ specific unobservable characteristics and year-specific effects, we found that the impacts of natural disasters vary according to specifications. Natural disasters enhance capital accumulation and technological progress in non-French-civil-law countries, but have no effect in these areas in French-civil-law countries.