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Natural Disasters, Firm Survival and Growth: Evidence from the Ise Bay Typhoon, Japan

Toshihiro Okubo () and Eric Strobl
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Eric Strobl: Department of Economics, Bern University

No 2020-005, Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University

Abstract: This paper investigates the damage impact of the 1959 Ise Bay Typhoon-the most destructive storm in Japanese history-on firm performance in Nagoya City. To this end, we combine firm-level data with a locally derived damage index measured in terms of the duration of storm surge-induced flooding. We find heterogeneous impacts of flood damage across firms and sectors. More specifically, older manufacturing firms tend to survive and, conditional on survival, longer time inundation moderated their employment and sales growth, but also promoted capital growth, suggesting investment in new machinery and facilities. In contrast, employment growth increased in the construction sector to satisfy the construction demand for rebuilding after the supertyphoon.

Keywords: Typhoon; Flood; Firm survival; Firm growth; Nagoya city (search for similar items in EconPapers)
JEL-codes: Q54 R10 R12 R14 D22 L25 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-02-25
New Economics Papers: this item is included in nep-bec, nep-ent, nep-env, nep-geo, nep-his, nep-sbm, nep-tid and nep-ure
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