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Firm-network characteristics and economic robustness to natural disasters

  • Henriet, Fanny
  • Hallegatte, Stéphane
  • Tabourier, Lionel

This article proposes a theoretical framework to investigate economic robustness to exogenous shocks such as natural disasters. It is based on a dynamic model that represents a regional economy as a network of production units through the disaggregation of sector-scale input–output tables. Results suggest that disaster-related output losses depend on direct losses heterogeneity and on the economic network structure. Two aggregate indexes – concentration and clustering – appear as important drivers of economic robustness, offering opportunities for robustness-enhancing strategies. Modern industrial organization seems to reduce short-term robustness in a trade-off against higher efficiency in normal times.

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 36 (2012)
Issue (Month): 1 ()
Pages: 150-167

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Handle: RePEc:eee:dyncon:v:36:y:2012:i:1:p:150-167
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