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

Publication | January 2020
Propagation of Positive Effects of Postdisaster Policies through Supply Chains: Evidence from the Great East Japan Earthquake and Tsunami

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.

A positive effect of the subsidies on small recipient firms’ postdisaster sales and employment was found in the study. There was also 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. The results indicate the propagation of postdisaster policy effects through supply chains.

Contents 

  • Introduction
  • Group Subsidies after the Great East Japan Earthquake and Tsunami
  • Data
  • Empirical Methodologies
  • Results on Direct Effects
  • Results on Indirect Effects
  • Discussion and Conclusions