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Global Sourcing in the Wake of Disaster: Evidence from the Great East Japan Earthquake

Author

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  • ZHU Lianming
  • ITO Koji
  • TOMIURA Eiichi

Abstract

While global sourcing by multinational firms has changed the landscape of international trade, little is known as to how firms alter their global sourcing pattern when facing uncertainty or negative shocks. In this paper, we use the Great East Japan Earthquake as an exogenous shock to identify the macro fluctuation on firms' offshoring. Using Japanese firm-level data from 2010-2013, we show that the earthquake increases offshoring in terms of yen value. By decomposing total offshoring into goods and service offshoring, we find the positive effect of earthquake is statistically significant for manufacturing offshoring, but not for service offshoring.

Suggested Citation

  • 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).
  • Handle: RePEc:eti:dpaper:16089
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    File URL: https://www.rieti.go.jp/jp/publications/dp/16e089.pdf
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    References listed on IDEAS

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    1. Pol Antràs & Davin Chor, 2013. "Organizing the Global Value Chain," Econometrica, Econometric Society, vol. 81(6), pages 2127-2204, November.
    2. Pol Antràs & Esteban Rossi-Hansberg, 2009. "Organizations and Trade," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 43-64, May.
    3. Gregory Corcos & Delphine M. Irac & Giordano Mion & Thierry Verdier, 2013. "The Determinants of Intrafirm Trade: Evidence from French Firms," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 825-838, July.
    4. Defever, Fabrice & Toubal, Farid, 2013. "Productivity, relationship-specific inputs and the sourcing modes of multinationals," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 345-357.
    5. 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.
    6. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
    7. repec:hrv:faseco:33077829 is not listed on IDEAS
    8. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    9. Nunn, Nathan & Trefler, Daniel, 2013. "Incomplete contracts and the boundaries of the multinational firm," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 330-344.
    10. Stephen Ross Yeaple, 2013. "The Multinational Firm," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 193-217, May.
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    Cited by:

    1. MIYAKAWA Daisuke & MIYAUCHI Yuhei & Christian PEREZ, 2017. "Forecasting Firm Performance with Machine Learning: Evidence from Japanese firm-level data," Discussion papers 17068, Research Institute of Economy, Trade and Industry (RIETI).

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