Pakistan is one of the developing countries where natural disasters are phenomenal. Natural disasters cause not only human losses, but it also effects the businesses and performance of the firms. Limited literature is available in the context of Pakistan, using firm location in districts and firm-level data, this thesis attempted to estimate the impact of the natural disasters on the operating performance of firms in Pakistan. For natural disasters, we capture the effect of major disasters of earthquake 2005, and flood 2010. The operating performance is measured in terms of profit-to- sales ratios, total assets, stock returns. We compare the outcomes of firm located in districts which were severely affected by these disasters to the firms which were located in less or not affected districts. Our findings suggest a significant negative effect of the natural disasters on the operating performance of the firms. Firms exposed to disasters have 4 times lower productivity, 3 times lower returns on assets compared to firms who located in not affected districts:- Dr. Naseem Faraz