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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

Author

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  • Takano, Keisuke
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.

Suggested Citation

  • Takano, Keisuke, 2019. "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," TDB-CAREE Discussion Paper Series E-2019-01, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    • Handle: RePEc:hit:tdbcdp:e-2019-01
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/30489/070careeDP-E-1901.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Interregional trade; Supply chain; Disaster risk; Spatial pattern; Diversity;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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