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Natural disasters, firm survival, and growth: Evidence from the Ise Bay Typhoon, Japan

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  • Toshihiro Okubo
  • Eric Strobl

Abstract

This paper investigates the damage impact of the 1959 Ise Bay Typhoon on firm survival and survivor performance in Nagoya City, Japan. We combine firm‐level data with a local damage proxy storm surge‐induced flooding. We find that firms in retail and wholesale were less and those in manufacturing more likely to survive after being flooding. There was some evidence of spillover effects from nearby regions on firm exit. Surviving firm performance was heterogeneous across sectors in that some (manufacturing and construction) upgraded and others (retail and wholesale) their capital. Indirect impacts from nearby regions were both positive and negative, contingent on the sector of operation.

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  • Toshihiro Okubo & Eric Strobl, 2021. "Natural disasters, firm survival, and growth: Evidence from the Ise Bay Typhoon, Japan," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 944-970, November.
    • Handle: RePEc:bla:jregsc:v:61:y:2021:i:5:p:944-970
    DOI: 10.1111/jors.12523
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    3. Hayato Kato & Toshihiro Okubo, 2022. "The Resilience of FDI to Natural Disasters Through Industrial Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(1), pages 177-225, May.
    4. Tetsuji Okazaki & Toshihiro Okubo & Eric Strobl, 2023. "Large Fires and the Rise of Fire Insurance in Pre-war Japan," CIRJE F-Series CIRJE-F-1220, CIRJE, Faculty of Economics, University of Tokyo.
    5. Adachi, Daisuke & Nakata, Hiroyuki & Sawada, Yasuyuki & Sekiguchi, Kunio, 2023. "Adverse selection and moral hazard in corporate insurance markets: Evidence from the 2011 Thailand floods," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 376-386.
    6. Apurba, Roy & Ilan, Noy & Harold E., Cuffe, 2021. "Income and Extratropical Cyclones in New Zealand," Working Paper Series 21117, Victoria University of Wellington, School of Economics and Finance.
    7. Ilan Noy & Toshihiro Okubo & Eric Strobl & Thomas Tveit, 2023. "The fiscal costs of earthquakes in Japan," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1225-1250, October.
    8. Meltzer, Rachel & Ellen, Ingrid Gould & Li, Xiaodi, 2021. "Localized commercial effects from natural disasters: The case of Hurricane Sandy and New York City," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    9. Apurba Roy & Ilan Noy, 2023. "Impact of extratropical cyclones, floods, and wildfires on firms’ financial performance in New Zealand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(4), pages 493-574, October.
    10. Tetsuji Okazaki & Toshihiro Okubo & Eric Strobl, 2020. "The Bright and Dark Side of Financial Support from Local and Central Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan," Keio-IES Discussion Paper Series 2020-001, Institute for Economics Studies, Keio University.

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    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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