Natural Disaster and Natural Selection

Hirofumi Uchida, Daisuke Miyakawa, Kaoru Hosono, Arito Ono, Taisuke Uchino and Iichiro Uesugi

No 25, Working Paper Series from Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University

Abstract: In this paper, we investigate whether a natural selection mechanism works for firm exit. By using data of firms after a devastating earthquake, the Greeat Tohoku Earthquake, we examine the impact of firm efficiency on firm exit both inside and outside the earthquake-affected areas. We find evidence suggesting that more efficeint firms are less likely to exit both inside and outside the affected areas, which supports the natural selection mechanism. However, we also find that the mechanism is weaker for those firms whose main banks were damaged by the earthquake, which suggests that damage to banks weakens the natural selection mechanism. We also apply the same methodology to the case of the Great Hanshin-Awaji Earthquake, and again find that the natural selection mechanism works both inside and outside the affected areas. However, no significant impact of bank damage is found on the exit probability of a firm.

Keywords: firm exit; natural selection; earthquake; natural disaster; evergreening (search for similar items in EconPapers)
JEL-codes: G21 L10 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2013-03
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/25602/ifn_wp025.pdf

Related works:
Working Paper: Natural Disaster and Natural Selection (2014)
Working Paper: Natural Disaster and Natural Selection (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:cinwps:25

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