Abstract
Over the past two decades, more than 11,000 U.S. counties have been impacted by natural disasters. This study investigates how banks and their depositors respond to such events using a difference-in-difference-in-differences (DDD) methodology combined with coarsened exact matching (CEM). Analyzing 1.3 million observations from 1999 to 2017, we find that natural disasters lead to a significant increase in deposit rates but do not affect the volume of deposits. Our findings suggest that banks raise deposit rates to counteract the potential withdrawal of funds, thereby maintaining stable deposit levels. This research provides new insights into the causal dynamics of deposit supply and demand in the face of natural disasters.
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Recommended Citation
Barth, James R.; Lee, Kang-Bok; and Yoon, Yeosong
(2024)
"What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters?,"
American Business Review: Vol. 27:
No.
2, Article 9.
DOI: 10.37625/abr.27.2.607-622
Available at:
https://digitalcommons.newhaven.edu/americanbusinessreview/vol27/iss2/9
DOI
10.37625/abr.27.2.607-622
