International propagation of economic shocks through global supply chains

Yuzuka Kashiwagi (), Petr Matous and Yasuyuki Todo
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Yuzuka Kashiwagi: Graduate School of Economics, Waseda University
Petr Matous: Complex Systems Research Group, Faculty of Engineering and IT, the University of Sydney.

No 1810, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: This study examines whether and how economic shocks by natural disasters propagate through global supply chains to regions not directly hit by disasters. Although such propagation within a country has been studied, this study contributes to the literature by incorporating international propagation. Using firm-level data for more than 100,000 major firms in the world that include information on supply-chain ties among them, we find evidence of intra-national propagation as found in the literature but no international propagation. We further investigate possible mechanisms, finding that internationalized firms' ability to substitute for damaged partners most likely explains the absence of international propagation.

Keywords: Global supply chains; Propagation of shocks; Spillover; Natural disasters (search for similar items in EconPapers)
JEL-codes: E32 F14 L14 Q54 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2018-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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