In this paper, we empirically measure the impact of natural disasters on firm-level
operating performance and examine if such impact can be mitigated by technology diversification.
Using major natural disasters specified by Barrot and Sauvagnat (2015) and factory
location data from the toxic release inventory (TRI) database, we first find that
firms with factories located in states affected by natural disasters are much less
profitable. Second, we find that firms with diversified technologies are significantly
less subject to the impact of natural disasters, suggesting that technology diversity
enhances firms' sustainability.