Long-term economic impact of disasters: Evidence from multiple earthquakes in China

Lulu Huang, Qiannan Liu and Yugang Tang

World Development, 2024, vol. 174, issue C

Abstract: This paper examines the short-term and long-term economic impacts of relative-ly small but more frequent earthquakes in China. Using a difference-in-differences approach based on prefecture-level city panel data, combined with a unique data set on seismic events in China, we find that both moderate and strong earthquakes significantly decrease affected prefectures’ GDP per capita in the long run. These effects vary depending on the level of local government fiscal autonomy, social capital intensity, and infrastructure development. We also find that three mechanisms contribute to long-term negative effects: the household savings rate, fixed asset investment, and innovation. Our results provide new insights for policymakers to address relatively small disasters, which can have a significant impact on the local economy in the long run.

Keywords: Moderate and strong earthquakes; GDP; Transmission channels (search for similar items in EconPapers)
JEL-codes: O10 Q54 R11 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:174:y:2024:i:c:s0305750x23002644

DOI: 10.1016/j.worlddev.2023.106446

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