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The effect of natural and man-made disasters on countries’ production efficiency

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  • George Halkos
  • Shunsuke Managi
  • Nickolaos Tzeremes

Abstract

This study intends to understand how disaster is related to countries’ production efficiency using a sample of 137 countries over 1980–2011. We analyze the effect of the number of man-made and natural disaster occurrences on countries’ technological change (swift of the frontier) and technological catch-up (distribution of efficiencies). The results reveal an inverted “U” shape relationship between countries’ technological change and technological catch-up with disaster occurrences. This finding suggests that the effect on countries’ production efficiency is positive for lower number of disaster events; however, after a specific threshold value, the effect becomes negative. The results also reveal that low-income countries are negatively affected much quicker compared to high-income countries. Finally, it is evident that the negative effect of disaster occurrences impacts first countries’ technological catch-up and then their technology change. Copyright Halkos et al. 2015

Suggested Citation

  • George Halkos & Shunsuke Managi & Nickolaos Tzeremes, 2015. "The effect of natural and man-made disasters on countries’ production efficiency," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-13, December.
    • Handle: RePEc:spr:jecstr:v:4:y:2015:i:1:p:1-13:10.1186/s40008-015-0019-2
    DOI: 10.1186/s40008-015-0019-2
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    Cited by:

    1. Massimiliano Agovino & Mariaconcetta Casaccia & Alessandro Crociata, 2017. "Effectiveness and efficiency of European Regional Development Fund on separate waste collection: evidence from Italian regions by a stochastic frontier approach," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(1), pages 105-137, April.
    2. Massimiliano Agovino & Antonio Garofalo & Katia Marchesano, 2018. "Do institutions affect the matching process of disabled people? The Italian case," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(2), pages 921-943, March.
    3. Darshana Rajapaksa & Moinul Islam & Shunsuke Managi, 2017. "Natural Capital Depletion: the Impact of Natural Disasters on Inclusive Growth," Economics of Disasters and Climate Change, Springer, vol. 1(3), pages 233-244, October.
    4. Rui Huang & Arunima Malik & Manfred Lenzen & Yutong Jin & Yafei Wang & Futu Faturay & Zhiyi Zhu, 2022. "Supply-chain impacts of Sichuan earthquake: a case study using disaster input–output analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(3), pages 2227-2248, February.
    5. Mohottala G. Kularatne & Namal N. Balasooriya & Sean Pascoe & Clevo Wilson, 2017. "Is there a locational productivity advantage for rice cultivation? Results from a technical efficiency analysis of water use in Sri Lankan village irrigation systems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(4), pages 789-806, October.

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    More about this item

    Keywords

    C14; D24; O47; Disasters; Production efficiency; Conditional efficiency; Nonparametric analysis;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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