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Natural Disasters and the Reshaping of Global Value Chains

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  • Freund,Caroline
  • Mattoo,Aaditya
  • Mulabdic,Alen
  • Ruta,Michele

Abstract

To understand the longer term consequences of natural disasters for global value chains, this paper examines trade in the automobile and electronic sectors after the 2011 earthquake in Japan. Contrary to widespread expectations, the analysis shows that the shock did not lead to reshoring, nearshoring, or diversification; and trade in intermediate products was disrupted less than trade in final goods. Imports did shift to new suppliers, especially where dependence on Japan was greater. But production relocated to developing countries rather than to other top exporters. Despite important differences, the observed pattern of switching may be relevant to disasters like the COVID-19 pandemic.

Suggested Citation

  • Freund,Caroline & Mattoo,Aaditya & Mulabdic,Alen & Ruta,Michele, 2021. "Natural Disasters and the Reshaping of Global Value Chains," Policy Research Working Paper Series 9719, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9719
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    Cited by:

    1. Finck, David & Tillmann, Peter, 2022. "The macroeconomic effects of global supply chain disruptions," BOFIT Discussion Papers 14/2022, Bank of Finland Institute for Emerging Economies (BOFIT).
    2. Yu, Jisang & Ijaz, Arusha, 2023. "Recovering from Natural Disaster through Exports: The Case of 2010 Pakistan Flood and EU Tariff Waiver on Pakistan Textile Exports," 2023 Annual Meeting, July 23-25, Washington D.C. 335710, Agricultural and Applied Economics Association.
    3. Korn, Tobias & Stemmler, Henry, 2022. "Your Pain, My Gain? On the Trade Relocation Effects from Civil Conflict," VfS Annual Conference 2022 (Basel): Big Data in Economics 264095, Verein für Socialpolitik / German Economic Association.
    4. Korn, Tobias & Stemmler, Henry, 2022. "Your Pain, My Gain? Estimating the Trade Relocation Effects from Civil Conflict," Hannover Economic Papers (HEP) dp-698, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. de Lucio, Juan & Díaz-Mora, Carmen & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2023. "Do firms react to supply chain disruptions?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 902-916.
    6. Chen, Hongyi & Tillmann, Peter, 2023. "Lockdown spillovers," Journal of International Money and Finance, Elsevier, vol. 137(C).

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    More about this item

    Keywords

    Natural Disasters; International Trade and Trade Rules; Industrial and Consumer Services and Products; Transport and Trade Logistics;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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