IDEAS home Printed from https://ideas.repec.org/a/spr/ediscc/v4y2020i3d10.1007_s41885-020-00065-0.html
   My bibliography  Save this article

The Heterogeneous Impact of Post-Disaster Subsidies on Small and Medium Firms

Author

Listed:
  • Yuzuka Kashiwagi

    (Waseda University)

Abstract

This paper examines the effect of Group Subsidy, which is a post-disaster subsidy for restoring and repairing facilities destroyed by great disasters, on the recovery of Japanese small- and medium-sized enterprises (SMEs) following the Great East Japan Earthquake. Group Subsidy was introduced in 2011 and continues to be reapplied in Japan. To assess the impact of this relatively new policy, we use rich firm-level data for firms in Japan that include information on supply-chain ties among them. Our estimates based on propensity score matching show that the subsidy was effective for the recovery of the performance of SMEs in the retail, manufacturing, construction, and energy sectors. However, the positive effect of the subsidy is largely reduced if the SMEs have links outside the disaster areas, except for firms in the construction and energy sector. In the service and wholesale sector, we find no significant difference between the recovery of SMEs with and without the subsidy.

Suggested Citation

  • Yuzuka Kashiwagi, 2020. "The Heterogeneous Impact of Post-Disaster Subsidies on Small and Medium Firms," Economics of Disasters and Climate Change, Springer, vol. 4(3), pages 601-623, October.
    • Handle: RePEc:spr:ediscc:v:4:y:2020:i:3:d:10.1007_s41885-020-00065-0
    DOI: 10.1007/s41885-020-00065-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41885-020-00065-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s41885-020-00065-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vasco M Carvalho & Makoto Nirei & Yukiko U Saito & Alireza Tahbaz-Salehi, 2021. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," The Quarterly Journal of Economics, Oxford University Press, vol. 136(2), pages 1255-1321.
    2. Holger Görg & Michael Henry & Eric Strobl, 2008. "Grant Support and Exporting Activity," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 168-174, February.
    3. 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, March.
    4. Vasco M Carvalho & Makoto Nirei & Yukiko U Saito & Alireza Tahbaz-Salehi, 0. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," The Quarterly Journal of Economics, Oxford University Press, vol. 136(2), pages 1255-1321.
    5. Shinya Horie & Shunsuke Managi, 2017. "Why do people stay in or leave Fukushima?," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 840-857, November.
    6. Thomas A. Garrett & Russell S. Sobel, 2003. "The Political Economy of FEMA Disaster Payments," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 496-509, July.
    7. Yuzuka Kashiwagi & Petr Matous & Yasuyuki Todo, 2018. "International propagation of economic shocks through global supply chains," Working Papers 1810, Waseda University, Faculty of Political Science and Economics.
    8. Jean-Noël Barrot & Julien Sauvagnat, 2016. "Input Specificity and the Propagation of Idiosyncratic Shocks in Production Networks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(3), pages 1543-1592.
    9. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
    10. WAKASUGI Ryuhei & TANAKA Ayumu, 2013. "Determinants of the Reconstruction Period from the Great East Japan Earthquake: Evidence from manufacturing firms in Tohoku (Japanese)," Discussion Papers (Japanese) 13002, Research Institute of Economy, Trade and Industry (RIETI).
    11. Po-Hsuan Hsu & Hsiao-Hui Lee & Shu-Cing Peng & Long Yi, 2018. "Natural Disasters, Technology Diversity, and Operating Performance," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 619-630, October.
    12. Sawada, Yasuyuki & Takasaki, Yoshito, 2017. "Natural Disaster, Poverty, and Development: An Introduction," World Development, Elsevier, vol. 94(C), pages 2-15.
    13. Hiroki Tanikawa & Shunsuke Managi & Cherry Myo Lwin, 2014. "Estimates of Lost Material Stock of Buildings and Roads Due to the Great East Japan Earthquake and Tsunami," Journal of Industrial Ecology, Yale University, vol. 18(3), pages 421-431, May.
    14. Yusuke Matsuki & Shunsuke Managi, 2016. "The Impact Of Natural Disasters On Manufacturing: Plant-Level Analysis For The Great Hanshin-Awaji Earthquake," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(01), pages 1-22, March.
    15. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
    16. McKenzie, David, 2012. "Beyond baseline and follow-up: The case for more T in experiments," Journal of Development Economics, Elsevier, vol. 99(2), pages 210-221.
    17. Suresh De Mel & David McKenzie & Christopher Woodruff, 2012. "Enterprise Recovery Following Natural Disasters," Economic Journal, Royal Economic Society, vol. 122(559), pages 64-91, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. KASHIWAGI Yuzuka & TODO Yasuyuki, 2019. "Propagation of Positive Effects of Post-disaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake," Discussion papers 19030, Research Institute of Economy, Trade and Industry (RIETI).
    2. Yuzuka Kashiwagi & Yasuyuki Todo, 2021. "Propagation Of Positive Effects Of Post‐Disaster Policies Through Supply Chains," Contemporary Economic Policy, Western Economic Association International, vol. 39(2), pages 348-364, April.
    3. Yasuyuki Todo & Hiroyasu Inoue, 2021. "Geographic Diversification of the Supply Chains of Japanese Firms," Asian Economic Policy Review, Japan Center for Economic Research, vol. 16(2), pages 304-322, July.
    4. Takano, Keisuke, 2019. "Does visible shock update firms' unrelated trade diversity in anticipation of future shock? Evidence from the Great East Japan Earthquake and expected Nankai Trough Earthquake," TDB-CAREE Discussion Paper Series E-2019-01, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    5. Yuzuka Kashiwagi & Petr Matous & Yasuyuki Todo, 2018. "International propagation of economic shocks through global supply chains," Working Papers 1810, Waseda University, Faculty of Political Science and Economics.
    6. 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.
    7. Yuzuka Kashiwagi & Yasuyuki Todo & Petr Matous, 2021. "Propagation of economic shocks through global supply chains—Evidence from Hurricane Sandy," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1186-1220, November.
    8. Längle, Katharina & Xu, Ankai & Tian, Ruijie, 2021. "Assessing the supply chain effect of natural disasters: Evidence from Chinese manufacturers," WTO Staff Working Papers ERSD-2021-13, World Trade Organization (WTO), Economic Research and Statistics Division.
    9. Hiroyasu Inoue & Yasuyuki Todo, 2020. "The propagation of economic impacts through supply chains: The case of a mega-city lockdown to prevent the spread of COVID-19," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-10, September.
    10. F. Zhou & W.J.W. Botzen, 2017. "The Impact of Natural Disasters on Firm Growth in Vietnam:: Interaction with Financial Constraints," Working Papers 17-20, Utrecht School of Economics.
    11. Bacchetta, Marc & Bekkers, Eddy & Piermartini, Roberta & Rubinova, Stela & Stolzenburg, Victor & Xu, Ankai, 2021. "COVID-19 and global value chains: A discussion of arguments on value chain organization and the role of the WTO," WTO Staff Working Papers ERSD-2021-3, World Trade Organization (WTO), Economic Research and Statistics Division.
    12. Hiroyasu Inoue & Yohsuke Murase & Yasuyuki Todo, 2021. "Do economic effects of the anti-COVID-19 lockdowns in different regions interact through supply chains?," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-19, July.
    13. Zhang, Si Ying, 2021. "Using equity market reactions and network analysis to infer global supply chain interdependencies in the context of COVID-19," Journal of Economics and Business, Elsevier, vol. 115(C).
    14. Stefan Borsky & Martin Jury, 2020. "The role of global supply chains in the transmission of weather induced production shocks," Graz Economics Papers 2020-13, University of Graz, Department of Economics.
    15. Fujin Zhou & Wouter Botzen, 2021. "Firm Level Evidence of Disaster Impacts on Growth in Vietnam," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 277-322, June.
    16. Hiroyasu Inoue & Yasuyuki Todo, 2020. "The propagation of the economic impact through supply chains: The case of a mega-city lockdown against the spread of COVID-19," Papers 2003.14002, arXiv.org.
    17. Ding, Li & Lam, Hugo K.S. & Cheng, T.C.E. & Zhou, Honggeng, 2021. "The contagion and competitive effects across national borders: Evidence from the 2016 Kumamoto earthquakes," International Journal of Production Economics, Elsevier, vol. 235(C).
    18. Yasuyuki Todo & Keita Oikawa & Masahito Ambashi & Fukunari Kimura & Shujiro Urata, 2021. "Robustness and Resilience of Supply Chains During the COVID-19 Pandemic: Findings from a Questionnaire Survey on the Supply Chain Links of Firms in ASEAN and India," Working Papers DP-2021-40, Economic Research Institute for ASEAN and East Asia (ERIA).
    19. Ademmer, Martin & Jannsen, Nils & Mösle, Saskia, 2020. "Extreme weather events and economic activity: The case of low water levels on the Rhine river," Kiel Working Papers 2155, Kiel Institute for the World Economy (IfW Kiel).
    20. Thomas J. Sargent & John Stachurski, 2022. "Economic Networks: Theory and Computation," Papers 2203.11972, arXiv.org, revised Jul 2022.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ediscc:v:4:y:2020:i:3:d:10.1007_s41885-020-00065-0. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.