IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

A Model of Stratified Production Process and Spatial Risk

Listed author(s):
  • Tatsuaki Kuroda

    ()

In 2011, Japanese firms suffered severe losses as a result of the Great East Japan Earthquake and the Thailand floods. The firms incurred damage continually because they depended on spatially dispersed supply chains. Final goods producers are essentially attracted to outsourcing because of the prevailing scale economy in modern machinery industries. In addition, certain firms have dispersed their plants to different locations to avoid risks from powerful earthquakes that are expected near most of the developed metropolitan areas in the region. Such a strategy, however, has ironically caused contiguous damage to these firms. To capture the characteristics of supply chain over space and the cascade of spatial risks, we set up a two-level structure of circles where firms can be categorized. The top circle is occupied by intermediate goods producers, who provide differentiated inputs for the final goods producers in the second circle. We assume that scale economy works with respect to the variety of intermediate goods. Thus, final goods producers purchase inputs from intermediate goods producers located in different places, while paying transport costs in the process. We then evaluate the two-level structure in terms of location-specific hazards such as earthquakes. A more dispersed supply chain corresponds to a greater likelihood that final goods producers would suffer losses from the spatial risk. Simulation results reveal that the expected damage may be less for intermediate goods producers with more dispersed locations. On the contrary, final goods producers may be better served being spatially concentrated. Copyright Springer Science+Business Media New York 2015

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s11067-014-9268-0
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Networks and Spatial Economics.

Volume (Year): 15 (2015)
Issue (Month): 2 (June)
Pages: 271-292

as
in new window

Handle: RePEc:kap:netspa:v:15:y:2015:i:2:p:271-292
DOI: 10.1007/s11067-014-9268-0
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/regional+science/journal/11067/PS2

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Henriet, Fanny & Hallegatte, Stéphane & Tabourier, Lionel, 2012. "Firm-network characteristics and economic robustness to natural disasters," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 150-167.
  2. Oded Cats & Erik Jenelius, 2014. "Dynamic Vulnerability Analysis of Public Transport Networks: Mitigation Effects of Real-Time Information," Networks and Spatial Economics, Springer, vol. 14(3), pages 435-463, December.
  3. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
  4. Yasuyuki Todo & Kentaro Nakajima & Petr Matous, 2015. "How Do Supply Chain Networks Affect The Resilience Of Firms To Natural Disasters? Evidence From The Great East Japan Earthquake," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 209-229, 03.
  5. World Bank & United Nations, 2010. "Natural Hazards, UnNatural Disasters : The Economics of Effective Prevention," World Bank Publications, The World Bank, number 2512, December.
  6. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
  7. Francisco Silva & Lucia Gao, 2013. "A Joint Replenishment Inventory-Location Model," Networks and Spatial Economics, Springer, vol. 13(1), pages 107-122, March.
  8. Stéphane Hallegatte & Valentin Przyluski, 2010. "The Economics of Natural Disasters," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(2), pages 14-24, July.
  9. Johannes Illenberger & Kai Nagel & Gunnar Flötteröd, 2013. "The Role of Spatial Interaction in Social Networks," Networks and Spatial Economics, Springer, vol. 13(3), pages 255-282, September.
  10. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, January.
  11. Mehrdad Shahabi & Shirin Akbarinasaji & Avinash Unnikrishnan & Rachel James, 2013. "Integrated Inventory Control and Facility Location Decisions in a Multi-Echelon Supply Chain Network with Hubs," Networks and Spatial Economics, Springer, vol. 13(4), pages 497-514, December.
  12. Masoud Yaghini & Mohammadreza Sarmadi & Nariman Nikoo & Mohsen Momeni, 2014. "Capacity Consumption Analysis Using Heuristic Solution Method for Under Construction Railway Routes," Networks and Spatial Economics, Springer, vol. 14(3), pages 317-333, December.
  13. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  14. Donald R. Davis & David E. Weinstein, 2002. "Bones, Bombs, and Break Points: The Geography of Economic Activity," American Economic Review, American Economic Association, vol. 92(5), pages 1269-1289, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:15:y:2015:i:2:p:271-292. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.