Propagation of Positive Effects of Postdisaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake and Tsunami

Yuzuka Kashiwagi () and Yasuyuki Todo
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Yuzuka Kashiwagi: Waseda University

No 604, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This study evaluates the impact of “group subsidies,” a policy intervention to repair and reinstall damaged capital goods and facilities of small and medium-sized enterprises after the Great East Japan earthquake and tsunami. In addition to their direct effect on firms that received the subsidies, we estimate their indirect effect on firms that did not receive the subsidies but were linked with recipient firms through supply chains. Employing a propensity score matching and analysis of variance approach, we find a positive effect of the subsidies on small recipient firms’ postdisaster sales and employment. We also find a positive indirect effect of the group subsidies on firms in disaster-hit prefectures that did not receive any group subsidy but were linked through supply chains with a recipient firm. Our results indicate the propagation of postdisaster policy effects through supply chains, which are often ignored in the academic literature and the policymaking arena.

Keywords: natural disasters; postdisaster policy; propagation; supply chains (search for similar items in EconPapers)
JEL-codes: H20 L14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-01-23
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0604

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