IDEAS home Printed from https://ideas.repec.org/a/taf/jriskr/v20y2017i2p195-217.html

How do natural and man-made disasters affect international trade? A country-level and industry-level analysis

Author

Listed:
  • Chang Hoon Oh

Abstract

This study examines the influence of disasters on international trade with a gravity equation model. Four types of disasters will be introduced: natural disasters, technological disasters, political risks, and financial crises. Existing literature implies that any type of disasters can either positively or negatively associated with international trade. The effects of disasters are different across the socioeconomic status of trade pairs and across industries as well as across different types of disasters. Results from country-level and industry-level show that natural disasters reduce international trade flows by raising trading and security costs and hardening borders. In contrast to previous findings, these results show that terrorism activities and technological disasters increase the international trade particularly between developed countries. The econometric specification controls unobserved characteristics of trade pairs and endogeneity problems. Managerial implications and future research are discussed.

Suggested Citation

  • Chang Hoon Oh, 2017. "How do natural and man-made disasters affect international trade? A country-level and industry-level analysis," Journal of Risk Research, Taylor & Francis Journals, vol. 20(2), pages 195-217, February.
    • Handle: RePEc:taf:jriskr:v:20:y:2017:i:2:p:195-217
    DOI: 10.1080/13669877.2015.1042496
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13669877.2015.1042496
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13669877.2015.1042496?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Nicolas Berman, 2009. "Financial Crises and International Trade: The Long Way to Recovery," Economics Working Papers ECO2009/23, European University Institute.
    2. Mr. Tobias N. Rasmussen, 2004. "Macroeconomic Implications of Natural Disasters in the Caribbean," IMF Working Papers 2004/224, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raluca Maran, 2025. "Do investors reward sovereign catastrophe bond issuance? Evidence from a panel of 26 disaster-prone countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(2), pages 705-741, May.
    2. Madhushika Perera & Shyama Ratnasiri, 2025. "Natural disasters, government effectiveness and agribusiness export competitiveness: Evidence from Developing Asia," 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. 121(8), pages 9311-9337, May.
    3. Quy Ta & Yothin Jinjarak & Ilan Noy, 2022. "“How Do Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes”," Open Economies Review, Springer, vol. 33(5), pages 945-971, November.
    4. Liu, Jiawen, 2025. "Shocks and Stability: Understanding Trade Resilience to Natural Disasters," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361043, Agricultural and Applied Economics Association.
    5. Mohan, Preeya, 2023. "The Impact of Tropical Storms on International Trade: Evidence from Eastern Caribbean Small Island Developing States," IDB Publications (Working Papers) 13084, Inter-American Development Bank.
    6. Saini, Swati & Parida, Yashobanta, 2025. "Do natural disasters translate into trade disasters?," International Economics, Elsevier, vol. 182(C).
    7. Osberghaus, Daniel, 2019. "The effects of natural disasters and weather variations on international trade: A review of the empirical literature," ZEW Discussion Papers 19-002, ZEW - Leibniz Centre for European Economic Research.
    8. Preeya S. Mohan, 2023. "The Impact of Tropical Storms on International Trade: Evidence from Eastern Caribbean Small Island Developing States," Economics of Disasters and Climate Change, Springer, vol. 7(2), pages 179-208, July.
    9. Osberghaus, Daniel, 2019. "The Effects of Natural Disasters and Weather Variations on International Trade and Financial Flows: a Review of the Empirical Literature," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 3, pages 305-325.
    10. Oh, Chang Hoon & Shin, Jiyoung & Oetzel, Jennifer, 2021. "How does experience change firms' foreign investment decisions to non-market events?," Journal of International Management, Elsevier, vol. 27(1).
    11. Sandi, Eleni, 2021. "Estimating the Impact of Natural Disasters on Caribbean Exports," Warwick-Monash Economics Student Papers 03, Warwick Monash Economics Student Papers.

    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. Iacovone, Leonardo & Ferro, Esteban & Pereira-López, Mariana & Zavacka, Veronika, 2019. "Banking crises and exports: Lessons from the past," Journal of Development Economics, Elsevier, vol. 138(C), pages 192-204.
    2. van Bergeijk, P.A.G. & Lazzaroni, S., 2013. "Macroeconomics of natural disasters," ISS Working Papers - General Series 50075, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    3. Paul Raschky, 2007. "Estimating the effects of risk transfer mechanisms against floods in Europe and U.S.A.: A dynamic panel approach," Working Papers 2007-05, Faculty of Economics and Statistics, Universität Innsbruck.
    4. -, 2014. "Handbook for disaster assessment," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 36823 edited by Eclac.
    5. Allan Wright & Patrice Borda, 2016. "Macroeconomic Fluctuations Under Natural Disaster Shocks in Central America and the Caribbean," IDB Publications (Working Papers) 97076, Inter-American Development Bank.
    6. João Tovar Jalles, 2024. "Financial Crises and Climate Change," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(1), pages 166-190, March.
    7. Noy, Ilan & Vu, Tam Bang, 2010. "The economics of natural disasters in a developing country: The case of Vietnam," Journal of Asian Economics, Elsevier, vol. 21(4), pages 345-354, August.
    8. Padamja Khandelwal & Agustin Roitman, 2013. "The Economics of Political Transitions: Implications for the Arab Spring," IMF Working Papers 2013/069, International Monetary Fund.
    9. Maryam Asghari & Elham Oliagard, 2017. "Trade and National Security: A Test for Best-Known Hypothesis," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(2), pages 403-431, Spring.
    10. Yanos Zylberberg, 2010. "Natural natural disasters and economic disruption," PSE Working Papers halshs-00564946, HAL.
    11. Makena Coffman & Ilan Noy, 2009. "In the Eye of the Storm: Coping with Future Natural Disasters in Hawaii," Working Papers 200904, University of Hawaii at Manoa, Department of Economics.
    12. Rupa Duttagupta & Mr. Guillermo Tolosa, 2006. "Fiscal Discipline and Exchange Rate Regimes: Evidence From the Caribbean," IMF Working Papers 2006/119, International Monetary Fund.
    13. Mechler, Reinhard, 2009. "Disasters and economic welfare : can national savings help explain post-disaster changes in consumption ?," Policy Research Working Paper Series 4988, The World Bank.
    14. Mohan, Preeya, 2017. "The economic impact of hurricanes on bananas: A case study of Dominica using synthetic control methods," Food Policy, Elsevier, vol. 68(C), pages 21-30.
    15. Tam Bang Vu & Calvin Luscombe & Shaun McKim, 2014. "Natural Disasters in Japan and Tourism in Developing Countries: The Case of the Pacific Islands," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(2), pages 98-107.
    16. Mr. Sebastian Sosa & Mr. Paul Cashin, 2009. "Macroeconomic Fluctuations in the Caribbean: The Role of Climatic and External Shocks," IMF Working Papers 2009/159, International Monetary Fund.
    17. Thi Hong Hanh Pham, 2010. "Effects of the 2008 Financial Crisis on developing Asia's Economic Growth," Economics Bulletin, AccessEcon, vol. 30(3), pages 1922-1934.
    18. Berlemann, Michael, 2015. "Hurricane Risk, Happiness and Life Satisfaction. Some Empirical Evidence on the Indirect Effects of Natural Disasters," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113073, Verein für Socialpolitik / German Economic Association.
    19. Matthew A. COLE & Robert J R ELLIOTT & Toshihiro OKUBO & Eric STROBL, 2013. "Natural Disasters and Plant Survival: The impact of the Kobe earthquake," Discussion papers 13063, Research Institute of Economy, Trade and Industry (RIETI).
    20. Nadia Benali & Mounir Ben Mbarek & Rochdi Feki, 2019. "Natural Disaster, Government Revenues and Expenditures: Evidence from High and Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(2), pages 695-710, June.

    More about this item

    Statistics

    Access and download statistics

    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:taf:jriskr:v:20:y:2017:i:2:p:195-217. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJRR20 .

    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.