The Effect of Tohoku Earthquake on Japan’s Bilateral Trade Distribution: Case Study of African Markets

Abstract

This paper examines the Japanese International Bilateral Trade Flow (JIBTF) in relation to the economic crisis, 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. The results of the study find that the Tohoku earthquake affects the DNoJ among Japanese trade partners. Specifically, 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.

Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade

“…This is because the geographical distribution of activities by multinational companies, which are in high interaction with domestic suppliers, bear the impact of positive/negative shocks on industrial production. Global fast growth from 2015-2018, for instance, had a positive impact on Japanese trade recovery from the Tohoku earthquake (Biyik, 2022b). This also applies to the spread of the negative influence from the case of the Global Financial Crisis (Acemoglu et al, 2015) and the Tohoku Earthquake (Carvalho et al, 2021) through sectoral linkage.…”

“…Japanese import highly depends on China and the US by 21.9% and 9.8%, respectively. Japanese trade with aggregated African countries presents approximately 2% of total Japanese trade over a 20-year period (Biyik, 2022b). Japan exports mainly manufacturing (high tech) goods while African countries export agricultural and raw (oil/materials) goods (Biyik, 2022a).…”

“…Knowledge embodied in import products can also advance VA through the spillover effect. Country importing/exporting commodities is directly influenced by technology depending on its absorption capacity (Biyik, 2022b;Halpern et al, 2015). Baldwin and Yan (2014) highlight that participating in GVCs can bring positive and significant gains in productivity for participating countries (Constantinescu et al, 2017).…”