The Great East Japan Earthquake of March 11, 2011 had a serious negative economic impact on the Japanese economy. The earthquake substantially reduced production not only in regions directly hit by the earthquake but also in other parts of Japan through supply chain disruptions. We examine the economic impact of the supply chain disruptions immediately following the earthquake using regional input-output (IO) tables, the Japan Industrial Productivity (JIP) database, and other regional statistics. To conduct our analysis, we modify the forward linkage methodology to take into account the first-stage bottleneck effect in the intermediate input of manufacturing production. We also create our own interregional input-output table by combining two different regional IO tables. Our estimates show that the production loss caused by the supply chain disruptions would be a maximum of 0.41% of the country's gross domestic product (GDP). We also analyzed the possible damage mitigating effects of establishing multiple supply chains to cope with potential natural disasters in the future. However, as multiple supply chains may lose production efficiency at the firm level, we need some policies that give incentives to firms which diversify supply chains.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.