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The impact of disasters on international trade

Author

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  • Gassebner, Martin
  • Keck, Alexander
  • Teh, Robert

Abstract

In this paper we examine the impact of major disasters on international trade flows using a gravity model. Our panel data consists of more than 170 countries for the years 1962-2004 yielding approximately 300,000 observations. We find that the driving forces determining the impact of such events are the democracy level and, to a lesser extent, the area of the affected country. The less democratic and the smaller a country the more are its trade flows reduced in case it is struck by a disaster. We are also able to distinguish between the effect of a disaster on an importing and an exporting country.

Suggested Citation

  • Gassebner, Martin & Keck, Alexander & Teh, Robert, 2006. "The impact of disasters on international trade," WTO Staff Working Papers ERSD-2006-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd200604
    DOI: 10.30875/64e59051-en
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    6. Bjørnskov, Christian & Dreher, Axel & Fischer, Justina A.V., 2010. "Formal institutions and subjective well-being: Revisiting the cross-country evidence," European Journal of Political Economy, Elsevier, vol. 26(4), pages 419-430, December.
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    8. Yanos Zylberberg, 2011. "Capital misallocation and credit constraints: Theory and evidence from natural," Working Papers halshs-00607212, HAL.
    9. Yanos Zylberberg, 2010. "Natural natural disasters and economic disruption," PSE Working Papers halshs-00564946, HAL.
    10. Edeoba William Edobor & Maria I. Marshall, 2021. "Earth, wind, water, fire and man: How disasters impact firm births in the USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(1), pages 395-421, May.
    11. Ji Guo & Hui Liu & Xianhua Wu & Jiong Gu & Shunfeng Song & Yinshan Tang, 2015. "Natural Disasters, Economic Growth and Sustainable Development in China―An Empirical Study Using Provincial Panel Data," Sustainability, MDPI, vol. 7(12), pages 1-18, December.
    12. Ainura Uzagalieva & Evžen Kocenda & Antonio Menezes, 2010. "Technological Imitation and Innovation in New European Union Markets," CESifo Working Paper Series 3039, CESifo.
    13. Cevik, Serhan & Jalles, João Tovar, 2023. "For whom the bell tolls: Climate change and income inequality," Energy Policy, Elsevier, vol. 174(C).
    14. Hallegatte, Stéphane & Ghil, Michael, 2008. "Natural disasters impacting a macroeconomic model with endogenous dynamics," Ecological Economics, Elsevier, vol. 68(1-2), pages 582-592, December.
    15. Paul A. Raschky & Manijeh Schwindt, 2016. "Aid, Catastrophes and the Samaritan's Dilemma," Economica, London School of Economics and Political Science, vol. 83(332), pages 624-645, October.
    16. Martin Heger & Alex Julca & Oliver Paddison, 2008. "Analysing the Impact of Natural Hazards in Small Economies: The Caribbean Case," WIDER Working Paper Series RP2008-25, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    International trade; disasters; gravity model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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