Effects of Post-Disaster Aid Measures to Firms: Evidence from Tohoku University Earthquake Recovery Firm Survey 2012–2015
Yuzuru Isoda*,, Satoru Masuda**, and Shin-Ichi Nishiyama***
*Earth Science Division, Graduate School of Science, Tohoku University
6-3 Aramaki-aza-Aoba, Aoba, Sendai, Miyagi 980-8578, Japan
**Graduate School of Economics and Management, Tohoku University, Miyagi, Japan
***Graduate School of Economics, Kobe University, Hyogo, Japan
Panel data of individual firms are a valuable source of information on the disaster resilience of the regional economy. Such data also helps to assess the effectiveness of government aids to recovery. Every year after the Great East Japan Earthquake 2011, from 2012 to 2015, Tohoku University’s Graduate School of Economics and Management conducted the Tohoku University Earthquake Recovery Firm Survey (TERFS) to obtain such information. The survey collected 25,826 responses over the 4-year period from a total of 11,090 firms in the east Tohoku region, the most severely affected region. Based on this survey, this paper assesses the effects of the conventional and new government recovery aid measures introduced to help firms affected by the disaster on the levels of business activity. The paper finds that group subsidy and debt reduction had important roles in the recovery of business activities, and demonstrates the importance of a panel survey in understanding and guiding policies for the resilience of the regional economy.
-  E. Cavallo and I. Noy, “Natural disasters and the economy – A survey,” Int. Review of Environmental and Resource Economics, Vol.5, No.1, pp. 63-102, 2011.
-  N. V. Loayza, E. Olaberría, J. Rigolini, and L. Christiaensen, “Natural disasters and growth: Going beyond the averages,” World Development, Vol.40, Issue 7, pp. 1317-1336, 2012.
-  J. Klomp and K. Valckx, “Natural disasters and economic growth: A meta-analysis,” Global Environmental Change, Vol.26, pp. 183-195, 2014.
-  J. M. Albala-Bertrand, “Natural disaster situations and growth: A macroeconomic model for sudden disaster impacts,” World Development, Vol.21, Issue 9, pp. 1417-1434, 1993.
-  M. Skidmore and H. Toya, “Do natural disasters promote long-run growth?,” Economic Inquiry, Vol.40, Issue 4, pp. 664-687, 2002.
-  A. Popp, “The effects of natural disasters on long run growth,” Major Themes in Economics, Vol.8, pp. 61-82, 2006.
-  H. Toya and M. Skidmore, “Economic development and the impacts of natural disasters,” Economic Letters, Vol.94, Issue 4, pp. 20-25, 2007.
-  J. C. Cuaresma, J. Hlouskova, and M. Obersteiner, “Natural disasters as Creative Destruction? Evidence from developing countries,” Economic Inquiry, Vol.46, Issue 2, pp. 214-226, 2008.
-  A. M. Leiter, H. Oberhofer, and P. A. Raschky, “Creative disasters? Flooding effects on capital, labour and productivity within European firms,” Environmental and Resource Economics, Vol.43, Issue 3, pp. 333-350, 2009.
-  S. Hallegatte and P. Dumas, “Can natural disasters have positive consequences? Investigating the role of embodied technical change,” Ecological Economics, Vol.68, Issue 3, pp. 777-786, 2009.
-  C. Raddatz, “The wrath of god: Macroeconomic costs of natural disasters,” World Bank Policy Research Working Paper, Report Number WPS5039, 2009.
-  P. Guimaraes, F. L. Hefner, and D. P. Woodward, ”Wealth and income effects of natural disasters: An econometric analysis of hurricane Hugo,” Review of Regional Studies, Vol.23, pp. 97-114, 1992.
-  W. DuPont and I. Noy, “What happened to Kobe? A reassessment of the impact of the 1995 earthquake in Japan,” Economic Development and Cultural Change, Vol.63, No.4, pp. 777-812, 2015.
-  S. Hallegatte, “An adaptive regional input-output model and its application to the assessment of the economic cost of Katrina,” Risk Analysis, Vol.28, Issue 3, pp. 779-799, 2008.
-  G. Felbermayr and J. Gröschl, “Naturally negative: the growth effects of natural disasters,” J. of Development Economics, Vol.111, pp. 92-106, 2014.
-  Y. Kajitani and H. Tatano, “Applicability of a spatial computable general equilibrium model to assess the short-term economic impact of natural disasters,” Economic Systems Research, Vol.30, Issue 3, pp. 289-312, 2017.
-  E. Cavallo, S. Galiani, I. Noy, and J. Pantano, “Catastrophic natural disasters and economic growth,” Review of Economics and Statistics, Vol.95, Issue 5, pp. 1549-1561, 2013.
-  Y. Kajitani and H. Tatano, “Estimation of lifeline resilience factors based on surveys of Japanese industries,” Earthquake Spectra, Vol.25, No.4, pp. 755-76, 2009.
-  S. L. Cutter, C. G. Burton, and C. T. Emrich, “Disaster resilience indicators for benchmarking baseline conditions,” J. of Homeland Security and Emergency Management, Vol.7, Issue 1, doi: 10.2202/1547-7355.1732, 2010.
-  A. Rose and E. Krausmann, “An economic framework for the development of a resilience index for business recovery,” Int. J. of Disaster Risk Reduction, Vol.5, pp. 73-83, 2013.
-  K. J. Tierney, “Business impacts of the Northridge earthquake,” J. of Contingencies and Crisis Management, Vol.5, Issue 2, pp. 87-97, 1997.
-  G. R. Webb, K. J. Tierney, and J. M. Dahlhamer, “Business and disasters: Empirical patterns and unanswered questions,” Natural Hazards Review, Vol.1, Issue 2, pp. 83-90, 2000.
-  C. Brown, J. Stevenson, S. Giovinazzi, E. Seville, and J. Vargo, “Factors influencing impacts on and recovery trends of organisations: Evidence from the 2010/2011 Canterbury earthquakes,” Int. J. of Disaster Risk Reduction, Vol.14, pp. 56-72, 2015.
-  M. Battisti and D. Deakins, ”The relationship between dynamic capabilities, the firm’s resource base and performance in a post-disaster environment,” Int. Small Business J., Vol.35, Issue 1, pp. 78-98. 2017.
-  S. Sydnor, L. Niehm, Y. Lee, M. Marshall, and H. Schrank, “Analysis of post-disaster damage and disruptive impacts on the operating status of small businesses after Hurricane Katrina,” Natural Hazards, Vol.85, Issue 3, pp. 1637-1663, 2017.
-  L. Huang, L. Wang, and J. Song, “Post-disaster business recovery and sustainable development: A study of 2008 Wenchuan earthquake,” Sustainability, Vol.10, No.3, doi: 10.3390/su10030651, 2018.
-  Y. Kajitani, S. E. Chang, and H. Tateno, “Economic Impacts of the 2011 Tohoku-Oki Earthquake and Tsunami,” Earthquake Spectra, Vol.29, No.S1, pp. S457-S478, 2013.
-  T. Hayashi, “Daisaigai no Keizaigaku (Economics of Large-scale Disaster),” PHP Interface, 2011 (in Japanese).
-  Y. Harada, “Shinsai Fukkou, Giman no Kozu (Revitalization from Earthquake Disaster, a Composition of Deceptions),” Shinchosha, 2012 (in Japanese).
-  M. Saito, “Shinsai Fukkou no Seiji Keizaigaku (Political Economy of Revitalization from Earthquake Disaster),” Nippon Hyoron sha Co., Ltd., 2015 (in Japanese).
-  Y. Honda and Y. Nakazawa, “Higashi Nihon Dai Shinsai karano Chiiki Keizai Fukkou (Revitalization of Regional Economy from the Great East Japan Earthquake),” Minerva Shobo, 2016 (in Japanese).
-  S. Tokunaga and M. Okiyama, “Daishinsai karano Fukkou to Chiiki Saisei no Moderu Bunseki (Revitalization from the Great Earthquake Disaster and Model Analysis),” Bunshin-do, 2014 (in Japanese).
-  H. Uchida, D. Miyakawa, K. Hosono, A. Ono, T. Uchino, and I. Uesugi, “Natural disaster and natural selection,” RIETI Discussion Paper, 14-E-055, 2014.
-  Y. Todo, K. Nakajima, and P. Matous, “How do supply chain networks affect the resilience of firms to natural disasters? Evidence from the Great East Japan Earthquake,” J. of Regional Science, Vol.55, Issue 2, pp. 209-229, 2015.
-  J. Tokui, K. Kawasaki, and T. Miyagawa, “The economic impact of supply chain disruptions from the Great East-Japan earthquake,” Japan and the World Economy, Vol.41, pp. 59-70, 2017.
-  N. Nakatani, O. Murao, K. Meguro, and K. Terumoto, “Business recovery conditions of private enterprises after the 2011 Great East Japan Earthquake and issues on business continuity measures for large-scale disaster management – A case study of small and medium-sized enterprises in Miyagi –,” IEICE Trans. on Fundamentals of Electronics, Communications and Computer Sciences, Vol.E99.A, Issue 8, pp. 1539-1550, 2016.
-  Y. Kashiwagi, Y. Todo, and P. Matous, “Propagation of Shocks by Natural Disasters through Global Supply Chains,” RIETI Discussion Paper Series, 18-E-041, 2018.
-  A. Masumura, A. Kubota, “Analysis of Damage and Survival of Business in the Tsunami Affected Area Caused by the Great East Japan Earthquake Using Economic Census Individual Data,” Summaries of Technical Papers of Annual Meeting, Architectural Institute of Japan 2019, pp. 865-867, 2019.
-  N. Hamaguchi, “Higashi Nihon Dai Shinsai Hisai Chiiki Seizougyou Kigyou no Fukkou Katei no Bunseki (Analysis of the Process of Revitalization of Manufacturing Firm is the Regions Affected by the Great East Japan Earthquake),” REITI Discussion Paper Series, 15-J-044, 2015 (in Japanese).
-  M. A. Cole, R. J. R. Elliott, T. Okubo, and E. Stroble, “The effectiveness of pre-disaster planning and post-disaster aid: examining the impact on plants of the Great East Japan Earthquake,” REITI Discussion Paper Series, 15-E-097, 2015.
-  H. Uchida and S. Nakanishi, “Higashi Nihon Dai Shinsai ni okeru Chusho Kigyou Shiensaku (Aid measures to Small and Medium Enterprises during the Great East Japan Earthquake),” Rippo to Chosa, No.318, pp. 32-45, 2011 (in Japanese).
-  J. Kamata, M. Dateoka, and S. Nakanishi, “Higashi Nihon Dai Shinsai Go no Chusho Kigyo Shien to Kongo no Kadai (Aids to Small and Medium Enterprises after the Great East Japan Earthquake and Future Challenges),” Rippo to Chosa, No.330, pp. 36-57, 2012 (in Japanese).
-  S. Masuda, “Sangyo Saisei to Fukkou Machizukuri (Industrial recovery and revitalization town planning),” Joint Editorial Committee for the Report on the Great East Japan Earthquake Disaster (Ed.), “Report on the Great East Japan Earthquake Disaster: Building Series Vol.11, Building Legislation/Urban Planning and Design,” Architectural Institute of Japan, pp. 196-206, 2019 (in Japanese).
-  Board of Audit of Japan, “Kaikei Kensain Ho Dai 30 Jo no 3 no Kitei ni Motuzuku Houkokusho (Report based on the Board of Audit Act 30-3: the Result of Audit on Implementation Status of Projects for Revitalization from the Great East Japan Earthquake),” 2017 (in Japanese).
-  Chiiki Sangyo Fukkou Chosa Kenkyu Project (Ed.), “Higashi Nihon Dai Shinsai Kenkyu I (the Great East Japan Earthquake Research I),” Kahoku Shinpo Shuppan Center, 2012 (in Japanese).
-  Chiiki Sangyo Fukkou Chosa Kenkyu Project (Ed.), “Higashi Nihon Dai Shinsai Kenkyu V (the Great East Japan Earthquake Research V),” Nanboku-sha, 2016 (in Japanese).
-  P. Kennedy, “A Guide to Econometrics,” 5th edition, MIT Press, 2003.
-  R. Andersen, “Modern Methods for Robust Regression,” Sage Publications, 2008.
This article is published under a Creative Commons Attribution-NoDerivatives 4.0 Internationa License.