This paper focuses on the Kobe Earthquake which occurred in January 1995 and examines the damage on firms and the recovery process that followed. Using a dataset of about 90,000 firms, we implement a fact-finding study on exits, relocations, and recovery investment and show the following. First, damaged firms that transacted with banks in the earthquake-affected area were more likely to go bankrupt than non-damaged firms. Second, damaged firms in industry agglomerations were more likely to relocate themselves from their original locations than damaged firms located outside of such agglomerations. Note, however, that relocation distances among damaged firms were small, that is, one-third of these relocated firms moved less than 1 kilometer. Third, the amount of capital investment increase for damaged firms that transacted with banks in the earthquake-affected area was significantly smaller than for damaged firms that did not.