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

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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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    References listed on IDEAS

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    Cited by:

    1. Doan Ngoc Thang, 2024. "How do regional extreme events shape supply-chain trade?," International Economics and Economic Policy, Springer, vol. 21(1), pages 117-149, February.
    2. Caroline Freund & Aaditya Mattoo & Alen Mulabdic & Michele Ruta, 2022. "Natural Disasters and the Reshaping of Global Value Chains," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 70(3), pages 590-623, September.
    3. Anirudh Shingal & Prachi Agarwal, 2020. "How did trade in GVC-based products respond to previous health shocks? Lessons for COVID-19," RSCAS Working Papers 2020/68, European University Institute.
    4. Ambroziak, Łukasz, 2020. "Wpływ pandemii COVID-19 na handel rolno-spożywczy Polski: pierwsze doświadczenia," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 20(35, Part ), December.
    5. 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.
    6. 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.
    7. Tran Manh Ha & Doan Ngoc Thang, 2023. "Economic sanction and global sourcing complexity: A cross‐country analysis," The World Economy, Wiley Blackwell, vol. 46(4), pages 1017-1050, April.
    8. 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).
    9. 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).
    10. Simola, Heli, 2021. "The impact of Covid-19 on global value chains," BOFIT Policy Briefs 2/2021, Bank of Finland Institute for Emerging Economies (BOFIT).

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