The Effect of Economic Crises on Japan’s Bilateral Trade Distribution: Examination of the Tohoku Earthquake Impact on African Markets

Abstract

This paper examines the Japanese International Bilateral Trade Flow (JIBTF) in relation to economic crises, such as the Tohoku earthquake, and focuses on changes in the Distribution Networks of JIBTF (DNoJ) concerning African countries and Japanese Major Trade Partners (JMTP). The Harmonized System 6-digit level (“total” and product level) panel data from 2001 to 2019 are analyzed by employing the (structural) gravity method. First, the results of the study find that the Tohoku earthquake, compared to the 2008 crisis, has a stronger negative impact on the JIBTF and affects the DNoJ among Japanese trade partners. Second, the results prove that Japanese trade intention with African markets decreases relatively. In other words, exporting to African countries has a negative interaction effect after 2015. On the contrary, this interaction effect on JMTP comparatively increases; thus, Japan relocates its export to other markets such as JMTP. The Tohoku earthquake shaped the JIBTF to be more integrated with the Asia-Pacific and the EU regions, instead of African markets.JEL Classification Codes: F10, F14, C23, C24