Business vulnerability assessment: a firm-level analysis of micro- and small businesses in China

Abstract

Micro- and small businesses are more vulnerable to natural hazards than the larger ones. However, there are few attempts to systematically assess their vulnerabilities. Existing business vulnerability assessments use aggregate-level data, which poorly account for the prevalence of micro- and informal businesses in some areas. Also, they focus on business sensitivity and have not incorporated key elements of adaptive capacity into analysis. This study explores a firm-level assessment approach that would work better under resource and data constraints, which are common challenges to developing-country researchers. Surveys were conducted in four jurisdictions of China: Sanya, Zhuhai, Macao and Hong Kong. A total of 596 urban and rural businesses were involved. Indicators of business sensitivity, exposure and adaptive capacity were built into a structured questionnaire. The results were turned into a set of metrics for cross-location comparison. Aggregated scores suggest that business vulnerabilities increase from Sanya, Zhuhai, Hong Kong to Macao. Additional tests show that the integrated vulnerability scores are geographically differentiated and demonstrate compatibility with theoretical expectations. The value of this approach lies in its appropriate and realistic requirements for conducting business vulnerability assessments in small, isolated or less developed communities. Future applications need to overcome some uncertainties in the assessment.