The Impact of Tropical Storms on International Trade: Evidence from Eastern Caribbean Small Island Developing States

Preeya S. Mohan ()
Additional contact information
Preeya S. Mohan: University of the West Indies

Economics of Disasters and Climate Change, 2023, vol. 7, issue 2, No 3, 179-208

Abstract: Abstract Eastern Caribbean Small Island Developing States (SIDS) have a high dependence on international trade for income, employment, and poverty reduction given their extreme openness, small market size, narrow range of resources, and productive capabilities and specialized economic structures. These features make them vulnerable to external shocks, the most frequent being tropical storms. The objective of this paper is to investigate the impact of tropical storms on international trade for 8 Eastern Caribbean SIDS over the period 2000–2019, as well as the mediating role of the Real Effective Exchange Rate (REER). The paper uses panel regression techniques along with mediation analysis applied to monthly export, import, and exchange rate data taken from the Eastern Caribbean Central Bank combined with a measure of hurricane destruction that accounts for ex-ante economic exposure to damage. The results indicate that hurricanes reduce exports of goods by 20 percent in the month of a strike and up to three months thereafter. The impact on imports is more immediate and less severe, reducing imports of goods by 11 per cent only in the month of a strike. The mediation analysis suggests that the REER plays no mediation role in explaining the impact of tropical storm damage on exports and imports in the region.

Keywords: Disasters: Hurricanes; International trade; Small Island Developing States; Caribbean (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s41885-023-00128-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:ediscc:v:7:y:2023:i:2:d:10.1007_s41885-023-00128-y

Ordering information: This journal article can be ordered from
https://www.springer ... mental/journal/41885

DOI: 10.1007/s41885-023-00128-y

Access Statistics for this article

Economics of Disasters and Climate Change is currently edited by Ilan Noy and Shunsuke Managi

More articles in Economics of Disasters and Climate Change from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().