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How Do Supply Chain Networks Affect the Resilience of Firms to Natural Disasters? Evidence from the Great East Japan Earthquake

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Listed:
  • TODO Yasuyuki
  • NAKAJIMA Kentaro
  • Petr MATOUS

Abstract

This paper examines how supply chain networks affected the resilience of firms to the Great East Japan Earthquake, particularly looking at the effects on the time period before resuming operations after the earthquake and sales growth from the pre- to the post-earthquake period. The results indicate that the expansion of supply chain networks has two opposing effects on the resilience of firms to disasters. On the one hand, when firms are connected with more firms through supply chain networks, they are more likely to experience disruptions in supply and demand, which delay recovery. On the other hand, firms can benefit from diversified networks with suppliers and clients because they can substitute the surviving firms in the network for the damaged partners and receive support from them. Our results indicate that the latter's positive effect on recovery exceeds the former's negative effect for many types of network, implying that diversified supply chain networks lead to the resilience of firms to natural disasters.

Suggested Citation

  • TODO Yasuyuki & NAKAJIMA Kentaro & Petr MATOUS, 2013. "How Do Supply Chain Networks Affect the Resilience of Firms to Natural Disasters? Evidence from the Great East Japan Earthquake," Discussion papers 13028, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:13028
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    References listed on IDEAS

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    1. Henriet, Fanny & Hallegatte, Stéphane & Tabourier, Lionel, 2012. "Firm-network characteristics and economic robustness to natural disasters," Journal of Economic Dynamics and Control, Elsevier, pages 150-167.
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    5. Y. Fujiwara & H. Aoyama, 2010. "Large-scale structure of a nation-wide production network," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 77(4), pages 565-580, October.
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    7. Hallegatte, Stephane, 2012. "Modeling the roles of heterogeneity, substitution, and inventories in the assessment of natural disaster economic costs," Policy Research Working Paper Series 6047, The World Bank.
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    Citations

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    Cited by:

    1. Uchida, Hirofumi & Miyakawa, Daisuke & Hosono, Kaoru & Ono, Arito & Uchino, Taisuke & Uesugi, Iichiro, 2015. "Financial shocks, bankruptcy, and natural selection," Japan and the World Economy, Elsevier, vol. 36(C), pages 123-135.
    2. Hayakawa, Kazunobu & Matsuura, Toshiyuki & Okubo, Fumihiro, 2015. "Firm-level impacts of natural disasters on production networks: Evidence from a flood in Thailand," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 244-259.
    3. repec:jic:wpaper:241 is not listed on IDEAS
    4. Shimada, Go, 2014. "A Quantitative Study of Social Capital in the Tertiary Sector of Kobe : Has Social Capital Promoted Economic Reconstruction Since the Great Hanshin Awaji Earthquake?," Working Papers 68, JICA Research Institute.
    5. SAWADA Yasuyuki & MASAKI Tatsujiro & NAKATA Hiroyuki & SEKIGUCHI Kunio, 2017. "Natural Disasters: Financial preparedness of corporate Japan," Discussion papers 17014, Research Institute of Economy, Trade and Industry (RIETI).
    6. Vasco M. CARVALHO & NIREI Makoto & SAITO Yukiko, 2014. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," Discussion papers 14035, Research Institute of Economy, Trade and Industry (RIETI).
    7. Tatsuaki Kuroda, 2015. "A Model of Stratified Production Process and Spatial Risk," Networks and Spatial Economics, Springer, vol. 15(2), pages 271-292, June.
    8. Petr MATOUS & TODO Yasuyuki, 2014. "The Effects of Endogenous Interdependencies on Trade Network Formation across Space among Major Japanese Firms," Discussion papers 14020, Research Institute of Economy, Trade and Industry (RIETI).
    9. Matthew A. COLE & Robert J R ELLIOTT & OKUBO Toshihiro & Eric STROBL, 2015. "The Effectiveness of Pre-Disaster Planning and Post-Disaster Aid: Examining the impact on plants of the Great East Japan Earthquake," Discussion papers 15097, Research Institute of Economy, Trade and Industry (RIETI).
    10. repec:eee:empfin:v:42:y:2017:i:c:p:66-89 is not listed on IDEAS
    11. Bachev, Hrabrin & Ito, Fusao, 2017. "Agricultural impacts of the Great East Japan Earthquake - six years later," MPRA Paper 79469, University Library of Munich, Germany.
    12. Hrabrin Bachev & Fusao Ito, 2016. "Socio-economic impacts of the march 2011 earthquake, tsunami and nuclear accident on agri-food chains in Japan," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 42-66,67-90.
    13. repec:spr:nathaz:v:87:y:2017:i:1:d:10.1007_s11069-017-2763-0 is not listed on IDEAS
    14. Bachev, Hrabrin, 2015. "Изследване На Социално-Икономическите Ефекти На Земетресението, Цунамито И Ядрената Авария Във Фукушима През Март 2011 Година Върху Агро-Хранителните Вериги В Япония
      [A study on socio-economic impa
      ," MPRA Paper 69426, University Library of Munich, Germany.
    15. ZHU Lianming & ITO Koji & TOMIURA Eiichi, 2016. "Global Sourcing in the Wake of Disaster: Evidence from the Great East Japan Earthquake," Discussion papers 16089, Research Institute of Economy, Trade and Industry (RIETI).
    16. Masashige Hamano & Wessel N. Vermeulen, "undated". "Adapting to within-country export barriers: Evidence from the Japan 2011 Tsunami," Working Papers 1706, Waseda University, Faculty of Political Science and Economics.

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