Flood Risk and Differential Firm Investment: Evidence from Dakar, Senegal

In many urban communities in low- and middle-income countries, the start of the rainy season is not a welcome relief, but instead a source of persistent problems. Heavy rainfall, coupled with insufficient drainage and minimal urban planning results in regular, seasonal flooding of homes and businesses (Rentscheler et al. (2023)). In urban and suburban Dakar, rising floodwaters pose a multitude of challenges for people living in these areas by restricting movement, increasing the risk of disease, and causing death (C40 CFF (2021)). This study, focused on small and medium enterprises, explores how regular, seasonal flooding influence firm performance and how coordination plays a role in mitigating impacts from flooding.