Evaluating public organization performance under extreme weather events: Does organizational adaptive capacity matter?

The study examines the impacts of extreme weather events on public organization performance. In response to the growing call for adaptive capacity development amid a worsening climate, it pays particular attention to the effects of organizational adaptive capacity. Three components of an organization's adaptive capacity are investigated: formal institutions, organizational slack and contracting out (inverse of capacity). We focus on organizations' technical efficiency as a key performance indicator. Using a sample of 108 bus transit system in the U.S. Northeast and Midwest from 2008 to 2017, the analysis applies the Battese and Coelli (1995) specification for stochastic frontier analysis (SFA) with panel data. A general model is estimated to incorporate the heterogeneity in both the level and efficiency of output. The results confirm the efficacy of organizational adaptive capacity to enhance efficiency amid extreme weather. Specifically, higher levels of organizational slack or lower levels of contracting out can boost technical efficiency under extreme weather. Formal institutions, while temporarily compromising technical efficiency, holds potential for salient efficiency gains in the long run. The conclusion ends with a discussion on the theoretical and practical implications of this study.