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Regional Effects of Natural Disasters in China

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  • Vu, Tam Bang
  • Noy, Ilan
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Abstract

We examine the effects of natural disasters on income and investment in China. Using detailed macroeconomic province-level data and their history of disaster exposure over the past two decades, and after accounting for two-way causality using a three-stage least-squares estimation procedure, we describe the relationship between disaster mortality and morbidity, disasters’ economic damages, government investment and regional economic activity and infrastructure development. The Chinese government’s aggressive investment in post-disaster reconstruction is discussed, and the implications of this investment for post-disaster private sector economic activity are analyzed empirically. We further investigate the differential effects of natural disasters on economic activity in the different provinces.

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File URL: http://researcharchive.vuw.ac.nz/handle/10063/2812
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Bibliographic Info

Paper provided by Victoria University of Wellington, School of Economics and Finance in its series Working Paper Series with number 2812.

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Date of creation: 2013
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Handle: RePEc:vuw:vuwecf:2812

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Postal: Alice Fong, Administrator, School of Economics and Finance, Victoria Business School, Victoria University of Wellington, PO Box 600 Wellington, New Zealand
Phone: +64 (4) 463-5353
Fax: +64 (4) 463-5014
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Web page: http://www.victoria.ac.nz/sef
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Keywords: China; Natural disasters; Environment; Investment; Recovery;

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References

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  2. Hornbeck, Richard A., 2012. "The Enduring Impact of the American Dust Bowl: Short- and Long-Run Adjustments to Environmental Catastrophe," Scholarly Articles 11303325, Harvard University Department of Economics.
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  7. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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  9. Ilan Noy & Tam Bang Vu, 2009. "The Economics of Natural Disasters in a Developing Country: The Case of Vietnam," Working Papers 200903, University of Hawaii at Manoa, Department of Economics.
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  12. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  13. Strobl, Eric, 2012. "The economic growth impact of natural disasters in developing countries: Evidence from hurricane strikes in the Central American and Caribbean regions," Journal of Development Economics, Elsevier, vol. 97(1), pages 130-141.
  14. Heger, Martin & Julca, Alex & Paddison, Oliver, 2008. "Analysing the Impact of Natural Hazards in Small Economies: The Caribbean Case," Working Paper Series RP2008/25, World Institute for Development Economic Research (UNU-WIDER).
  15. Cavallo, Eduardo & Noy, Ilan, 2011. "Natural Disasters and the Economy — A Survey," International Review of Environmental and Resource Economics, now publishers, vol. 5(1), pages 63-102, May.
  16. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, December.
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