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Postdisaster Subsidies for Small and Medium Firms: Insights for Effective Targeting

Author

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  • Kashiwagi, Yuzuka

    (Waseda University)

Abstract

This paper examines the effect of capital subsidies after great disasters on the recovery of small and medium-sized enterprises (SMEs) using propensity score matching estimations. The estimates show that capital subsidies were effective for the recovery of the performance of SMEs in the retail sector. However, in manufacturing and other service sectors, it finds no significant difference between the recovery of SMEs with and without the subsidy. Utilizing firm-level supply chain data, it further explores the mechanism behind the heterogeneity across sectors. The results suggest that the heterogeneity comes from variations in the degree of private support across sectors rather than variations in supply chain disruption.

Suggested Citation

  • Kashiwagi, Yuzuka, 2019. "Postdisaster Subsidies for Small and Medium Firms: Insights for Effective Targeting," ADB Economics Working Paper Series 597, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0597
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    References listed on IDEAS

    as
    1. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
    2. WAKASUGI Ryuhei & TANAKA Ayumu, 2013. "Determinants of the Reconstruction Period from the Great East Japan Earthquake: Evidence from manufacturing firms in Tohoku (Japanese)," Discussion Papers (Japanese) 13002, Research Institute of Economy, Trade and Industry (RIETI).
    3. repec:idb:brikps:70238 is not listed on IDEAS
    4. 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.
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    Cited by:

    1. Takano, Keisuke & Okamuro, Hiroyuki, 2020. "Place-based SME finance policy and local industrial revivals: An empirical analysis of a directed credit program after WW2," TDB-CAREE Discussion Paper Series E-2020-01, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.

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    More about this item

    Keywords

    disasters; enterprise recovery; microeconomic impact of aid; supply chains;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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