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Firm-level impacts of natural disasters on production networks: Evidence from a flood in Thailand

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  • Hayakawa, Kazunobu
  • Matsuura, Toshiyuki
  • Okubo, Fumihiro

Abstract

This paper explores the firm-level impact of the 2011 flooding in Thailand, specifically, the impact on procurement patterns at Japanese affiliates in Thailand. We find that, first, small firms are more likely to lower their local procurement share, especially their share of procurement from other Japanese-owned firms in Thailand. Second, young firms are more likely to increase their share of imports from Japan, whereas old firms are more likely to look to China. Third, there is no impact on imports from ASEAN and other countries. These findings are useful for uncovering how multinationals adjust their production networks before and after natural disasters.

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  • Hayakawa, Kazunobu & Matsuura, Toshiyuki & Okubo, Fumihiro, 2015. "Firm-level impacts of natural disasters on production networks: Evidence from a flood in Thailand," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 244-259.
    • Handle: RePEc:eee:jjieco:v:38:y:2015:i:c:p:244-259
    DOI: 10.1016/j.jjie.2015.10.001
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    Cited by:

    1. Hayato Kato & Toshihiro Okubo, 2017. "The Impact of a Natural Disaster on Foreign Direct Investment and Vertical Linkages," Keio-IES Discussion Paper Series 2017-018, Institute for Economics Studies, Keio University.
    2. Elliott, Robert J.R. & Liu, Yi & Strobl, Eric & Tong, Meng, 2019. "Estimating the direct and indirect impact of typhoons on plant performance: Evidence from Chinese manufacturers," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    3. Hayato Kato & Toshihiro Okubo, 2022. "The Resilience of FDI to Natural Disasters Through Industrial Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(1), pages 177-225, May.
    4. Jasmin Gröschl & Alexander Sandkamp, 2023. "Flood Events and Plant Level Trade: A Chinese Experience," ifo Working Paper Series 389, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Hu, Xi & Pant, Raghav & Hall, Jim W. & Surminski, Swenja & Huang, Jiashun, 2019. "Multi-scale assessment of the economic impacts of flooding: evidence from firm to macro-level analysis in the Chinese manufacturing sector," LSE Research Online Documents on Economics 100534, London School of Economics and Political Science, LSE Library.
    6. LIANG, Licheng & MATSUURA, Toshiyuki, 2023. "Adjustments of Multinational’s Production Activities in Response to the US-Sino Trade War : Evidence from Japanese affiliate-level data," Discussion Paper Series 745, Institute of Economic Research, Hitotsubashi University.
    7. F. Zhou & W.J.W. Botzen, 2017. "The Impact of Natural Disasters on Firm Growth in Vietnam:: Interaction with Financial Constraints," Working Papers 17-20, Utrecht School of Economics.
    8. Xi Hu & Raghav Pant & Jim W. Hall & Swenja Surminski & Jiashun Huang, 2019. "Multi-Scale Assessment of the Economic Impacts of Flooding: Evidence from Firm to Macro-Level Analysis in the Chinese Manufacturing Sector," Sustainability, MDPI, vol. 11(7), pages 1-18, April.
    9. Li, C. & van Bergeijk, P.A.G., 2016. "Do natural disasters stimulate international trade?," ISS Working Papers - General Series 622, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    10. Jack Clampit & Dinesh Hasija & Michael Dugan & John Gamble, 2021. "The Effect of Risk, R&D Intensity, Liquidity, and Inventory on Firm Performance during COVID-19: Evidence from US Manufacturing Industry," JRFM, MDPI, vol. 14(10), pages 1-16, October.
    11. LIANG, Licheng, 2023. "Resilience of Japanese Multinational Enterprises' Production Networks during the COVID-19 Pandemic," Discussion Paper Series 742, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    Flooding; Multinational enterprises; Natural disasters; Production networks; Thailand;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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