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Natural Disasters, Industrial Clusters and Manufacturing Plant Survival

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  • Matthew A. COLE
  • Robert J R ELLIOTT
  • Toshihiro OKUBO
  • Eric STROBL

Abstract

In this paper, we examine the role of industrial clusters and infrastructure in mitigating or magnifying the impact of the 1995 Kobe earthquake on the survival of manufacturing plants and their post-earthquake economic performance. Our methodological approach is to use information on building-level and infrastructure damages and other plant and building-characteristics including district-level variables to control for spatial dependencies to estimate a cox-proportional hazard model. Our results show that plants that were members of existing clusters were less likely to survive although we found some evidence that damaged plants in stronger clusters had a better survival probability. Further analysis shows that the strength of the cluster had no impact on a number of performance indicators including productivity, employment and output. Road damage in the nearby locality has a negative impact on plant survival.

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  • Matthew A. COLE & Robert J R ELLIOTT & Toshihiro OKUBO & Eric STROBL, 2015. "Natural Disasters, Industrial Clusters and Manufacturing Plant Survival," Discussion papers 15008, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15008
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    2. Aloysius Gunadi Brata & Henri L. F. De Groot & Wouter Zant, 2018. "Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)," Economies, MDPI, vol. 6(2), pages 1-14, April.
    3. Lochan Kumar Batala & Wangxing Yu & Anwar Khan & Kalpana Regmi & Xiaoli Wang, 2021. "Natural disasters' influence on industrial growth, foreign direct investment, and export performance in the South Asian region of Belt and road initiative," 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. 108(2), pages 1853-1876, September.
    4. Masashige Hamano & Wessel N. Vermeulen, 2017. "Adapting to within-country export barriers: Evidence from the Japan 2011 Tsunami," Working Papers 1706, Waseda University, Faculty of Political Science and Economics.

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