Do natural disasters affect product development? Evidence from trademarks

We examine the impact of natural disasters at the county-level on trademark registrations (representing the commercialization of established technological innovations) in a large sample of U.S. public companies. Our results identify a reduction in trademark registrations following a disaster, which we find to be associated with (i) financial constraints on firms, (ii) reduced commitment to product development as evidenced by lower R&D and advertisement spending, and (iii) reduced human capital due to the tendency of marketing talents to avoid areas affected by disasters. Despite the reduction in trademark registrations, we find that firms significantly increase their innovation efficiency after a natural disaster, meaning that they convert a higher proportion of existing patents into trademarks than in non-disaster periods.