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Building Business Resilience to Disasters

Author

Listed:
  • Yutaro Izumi

    (National Graduate Institute for Policy Studies)

  • Hiroyuki Nakata

    (The University of Tokyo, and Research Institute of Economy, Trade and Industry)

  • Yasuyuki Sawada

    (Faculty of Economics, The University of Tokyo)

  • Kunio Sekiguchi

    (Ministry of Economy, Trade and Industry.)

Abstract

This paper studies the impacts of natural disasters on corporate disaster risk man- agement. Using unique plant-level data from Thailand collected after the 2011 floods, we find that inundation/direct loss experience stimulates flood risk awareness and encourages plants to develop a business continuity plan (BCP), but indirect loss expe- rience does not. We also find evidence consistent with the existence of nonnegligible fixed costs in BCP development. Furthermore, subscription to flood insurance amongst plants with inundation/direct loss experience dropped after the floods, suggesting that a BCP acts as a critical substitute for insurance as part of disaster risk management strategies.

Suggested Citation

  • Yutaro Izumi & Hiroyuki Nakata & Yasuyuki Sawada & Kunio Sekiguchi, 2024. "Building Business Resilience to Disasters," CIRJE F-Series CIRJE-F-1223, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2024cf1223
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2024/2024cf1223.pdf
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