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Does visible shock update firms' unrelated trade diversity in anticipation of future shock? Evidence from the Great East Japan Earthquake and expected Nankai Trough Earthquake

Keisuke Takano

No E-2019-01, TDB-CAREE Discussion Paper Series from Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University

Abstract: This paper investigates empirically the interrelationship between the update of risk perception of expected disaster through the actual disaster damage and the change in the spatial distribution of inter-firm transactional networks (supply chains) around the hazardous area of the expected Nankai Trough Earthquake after the Great East Japan Earthquake from 2009 to 2017. By adopting the propensity score matching and the difference-in-difference (-indifferences) method, this study estimates the effects of tsunami damage on the magnitude of the spatial dispersion of the supply chain network stemmed from risk perception. The results show that the existence of suppliers in the Nankai Trough area per se did not or marginally lead to the supply chain dispersion regardless of the size of firms, while the supply chains of medium-size firms who had suppliers in both the Nankai Trough area and the damaged area of the Great East Japan Earthquake was spatially dispersed after 2011.

Keywords: Interregional trade; Supply chain; Disaster risk; Spatial pattern; Diversity (search for similar items in EconPapers)
JEL-codes: R11 R12 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
Date: 2019-06
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