Economic benefits and the geographic aspect of business behaviour

Abstract

PurposeWhile existing research confirms that hazardous locations increase fear and decrease entrepreneurial intentions, there is only limited knowledge on why and how business managers decide to invest in flood-prone areas to create economic benefits. The purpose of this paper is to employ location and protection motivation theories as complementary lenses for this investigation.Design/methodology/approachData were purposively collected from ten businesses. Then, using MAXQDA 2018 software programme for qualitative data, a systematic content analysis was carried out to draw empirical insights from the selected cases.FindingsConsistent with both location and protection motivation theories, research findings show that strategic location, proximity to supporting and related businesses, availability of public goods, lack of alternative locations and proximity to social services are the key drivers related to location decisions. Furthermore, the economic benefits gained from flood-prone areas overshadow the adverse impact of floods, compelling business managers to apply structural and non-structural strategies to overcome flood risks.Originality/valueThis is a pioneering phenomenon-based research contributing to the understanding of the geographic aspect of business behaviour by explaining why and how business managers decide to invest in flood-prone instead of safer areas. It differs from previous studies by building on the overlooked complementarities between location theory and protection motivation theory in explaining the economic benefits accruing from flood-prone areas. Finally, the study calls for business managers and policy advisers to safely align the use of flood-prone areas with income-generating activities.