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The Impacts of Natural Disasters on Plants' Growth: Evidence from the Great Hanshin-Awaji (Kobe) Earthquake

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  • TANAKA Ayumu

Abstract

The Great Hanshin-Awaji (Kobe) Earthquake in 1995 affected numerous plants in Kobe. In this study, I focus on this earthquake and use plant-level data to re-examine the creative disaster hypothesis which states that natural disasters enhance the growth of firms or plants in the affected areas. I employ the matching method and the difference-in-difference (DID) approach to reveal the effects of the quake. The results show that the plants that survived in the most devastated districts of Kobe faced severe negative effects in terms of employment growth and value added in the subsequent three years. This result is not consistent with previous empirical studies that support the creative disaster hypothesis.

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  • TANAKA Ayumu, 2013. "The Impacts of Natural Disasters on Plants' Growth: Evidence from the Great Hanshin-Awaji (Kobe) Earthquake," Discussion papers 13051, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:13051
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    1. Elliott, Robert J.R. & Liu, Yi & Strobl, Eric & Tong, Meng, 2019. "Estimating the direct and indirect impact of typhoons on plant performance: Evidence from Chinese manufacturers," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    2. Alves, Pedro Jorge & Lima, Ricardo Carvalho de Andrade & Emanuel, Lucas, 2022. "Natural disasters and establishment performance: Evidence from the 2011 Rio de Janeiro Landslides," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    3. 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.
    4. Maribel Jiménez Martínez & Mónica Jiménez Martínez & Rocío Romero-Jarén, 2020. "How resilient is the labour market against natural disaster? Evaluating the effects from the 2010 earthquake in Chile," 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. 104(2), pages 1481-1533, November.
    5. Apergis, Nicholas & Danuletiu, Dan & Xu, Bing, 2022. "CDS spreads and COVID-19 pandemic," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 76(C).
    6. Meltzer, Rachel & Ellen, Ingrid Gould & Li, Xiaodi, 2021. "Localized commercial effects from natural disasters: The case of Hurricane Sandy and New York City," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    7. Toshihiro Okubo & Eric Strobl, 2021. "Natural disasters, firm survival, and growth: Evidence from the Ise Bay Typhoon, Japan," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 944-970, November.
    8. 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).
    9. Edeoba William Edobor & Maria I. Marshall, 2021. "Earth, wind, water, fire and man: How disasters impact firm births in the USA," 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. 107(1), pages 395-421, May.
    10. Aloysius Gunadi Brata & Henri L. F. De Groot & Wouter Zant, 2018. "Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)," Economies, MDPI, vol. 6(2), pages 1-14, April.
    11. Kyoo‐Man Ha, 2018. "Plant indicator status and implications for natural disaster management in both developed communities and indigenous communities," Natural Resources Forum, Blackwell Publishing, vol. 42(1), pages 32-41, February.
    12. Masashige Hamano & Wessel N. Vermeulen, 2017. "Adapting to within-country export barriers: Evidence from the Japan 2011 Tsunami," Working Papers 1706, Waseda University, Faculty of Political Science and Economics.
    13. 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.
    14. Tetsuji Okazaki & Toshihiro Okubo & Eric Strobl, 2020. "The Bright and Dark Side of Financial Support from Local and Central Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan," Keio-IES Discussion Paper Series 2020-001, Institute for Economics Studies, Keio University.
    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. Oudom Hean & Nattanicha Chairassamee, 2021. "Household consumption expenditure in Thailand during the first COVID-19 lockdown," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 28(2), pages 1-37, December.
    17. 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.

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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