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

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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.

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Acknowledgements

The authors acknowledge the funding support from Victoria University of Wellington’s Research Establishment Grant (Grant Number: 223087), and from the Education University of Hong Kong’s Research Cluster Fund 2019/20 and the Strategic Research Fund of the Department of Social Sciences of the same university.

Funding

Funding support was provided by Victoria University of Wellington’s Research Establishment Grant (Grant Number: 223087), and by the Education University of Hong Kong’s Research Cluster Fund 2019/20 and its Strategic Research Fund of the Department of Social Sciences.

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Authors and Affiliations

  1. School of Geography, Environment and Earth Sciences, New Zealand Climate Change Research Institute, Victoria University of Wellington, Room 128, Cotton Building, 21 Kelburn Parade, PO Box 600, Wellington, 6140, New Zealand

    Alex Y. Lo

  2. Public and Social Policy Research Centre, School of Arts and Social Sciences, The Open University of Hong Kong, Hong Kong, China

    Shuwen Liu

  3. Department of Social Sciences, The Education University of Hong Kong, Hong Kong, China

    Alice S. Y. Chow, Qing Pei & Lewis T. O. Cheung

  4. Department of Science and Environmental Studies, The Education University of Hong Kong, Hong Kong, China

    Lincoln Fok

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  1. Alex Y. Lo
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AYL, SL, ASYC, QP, LTOC, LF conducted the research and prepared the manuscript.

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Correspondence to Alex Y. Lo.

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Lo, A.Y., Liu, S., Chow, A.S.Y. et al. Business vulnerability assessment: a firm-level analysis of micro- and small businesses in China. Nat Hazards 108, 867–890 (2021). https://doi.org/10.1007/s11069-021-04710-z

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