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How do exporters respond to exogenous shocks: Evidence from Japanese firm-level data

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  • Tanaka, Ayumu
  • Ito, Banri
  • Wakasugi, Ryuhei

Abstract

This study examines how exporters respond to an exogenous shock, using an export shock that occurred after the 2012 political conflict over the East China Sea's islands. Because of the political conflict, Japanese firms faced considerable decrease in exports to China. By using Japanese firm-level data for the period 2011–2013 and by employing the difference-in-differences method, we analyze the impact of the conflict on employment in Japan. The estimation results provide evidence that Japanese firms exporting to China tended to respond to the exogenous trade shock by reducing their number of temporary workers. This finding suggests that trade shocks due to the international conflict hit the most insecure workers.

Suggested Citation

  • Tanaka, Ayumu & Ito, Banri & Wakasugi, Ryuhei, 2019. "How do exporters respond to exogenous shocks: Evidence from Japanese firm-level data," Japan and the World Economy, Elsevier, vol. 51(C), pages 1-1.
    • Handle: RePEc:eee:japwor:v:51:y:2019:i:c:4
    DOI: 10.1016/j.japwor.2019.100962
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    Cited by:

    1. Friedrich, Benjamin U. & Zator, Michał, 2023. "Flexibility costs of debt: Danish exporters during the cartoon crisis," Journal of Financial Economics, Elsevier, vol. 148(2), pages 91-117.
    2. Lastauskas, Povilas & Proškutė, Aurelija & Žaldokas, Alminas, 2023. "How do firms adjust when trade stops?," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 287-307.
    3. Timothy DESTEFANO & HANEDA Sho & KWON Hyeog Ug, 2019. "Determinants of Structural Adjustment and Employment Use in Japan: Firm Characteristics, Offshoring and Industrial Robotics," Discussion papers 19067, Research Institute of Economy, Trade and Industry (RIETI).
    4. Mathias Juust, 2021. "Trade Effects Of A Negative Export Shock On Direct Exporters And Wholesalers," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 133, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    5. Thorbecke, Willem, 2019. "Why Japan lost its comparative advantage in producing electronic parts and components," Journal of the Japanese and International Economies, Elsevier, vol. 54(C).

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    More about this item

    Keywords

    Exports; Temporary workers; Political conflict; Difference-in-differences estimation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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