Propagation of Positive Effects of Postdisaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake and Tsunami

27 Pages Posted: 5 May 2020

See all articles by Yuzuka Kashiwagi

Yuzuka Kashiwagi

National Research Institute for Earth Science and Disaster Resilience

Yasuyuki Todo

Waseda University

Date Written: Jan 23, 2020

Abstract

This study evaluates the impact of “group subsidies,” a policy intervention to repair and reinstall damaged capital goods and facilities of small and medium-sized enterprises after the Great East Japan earthquake and tsunami. In addition to their direct effect on firms that received the subsidies, we estimate their indirect effect on firms that did not receive the subsidies but were linked with recipient firms through supply chains. Employing a propensity score matching and analysis of variance approach, we find a positive effect of the subsidies on small recipient firms’ postdisaster sales and employment. We also find a positive indirect effect of the group subsidies on firms in disaster-hit prefectures that did not receive any group subsidy but were linked through supply chains with a recipient firm. Our results indicate the propagation of postdisaster policy effects through supply chains, which are often ignored in the academic literature and the policymaking arena.

Keywords: natural disasters, postdisaster policy, propagation, supply chains

JEL Classification: H20, L14

Suggested Citation

Kashiwagi, Yuzuka and Todo, Yasuyuki, Propagation of Positive Effects of Postdisaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake and Tsunami (Jan 23, 2020). Asian Development Bank Economics Working Paper Series No. 604, Available at SSRN: https://ssrn.com/abstract=3590905 or http://dx.doi.org/10.2139/ssrn.3590905

Yuzuka Kashiwagi (Contact Author)

National Research Institute for Earth Science and Disaster Resilience ( email )

3-1 tennnoudai, tsukuba-shi
Ibaraki, 305-0006
Japan

Yasuyuki Todo

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

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