Estimating the direct and indirect impact of typhoons on plant performance: Evidence from Chinese manufacturers

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15 Citations (Scopus)


We quantify the impact of typhoons on manufacturing plants in China. To this end we construct a panel data set of precisely geo-located plants and a plant-level measure of typhoon damage derived from storm track data and a wind field model. Our econometric results reveal that the impact on plant sales can be considerable, although the effects are relatively short-lived. Annual total costs to Chinese plants from typhoons are estimated to be in the range of US$ 3.2 billion (2017 prices), or about 1 per cent of average turnover. When we examine the channels by which plants react to a storm event we find that there is some buffering through an increase in debt and a reduction in liquidity. In terms of propagating the shock through foreign or domestic channels, our estimates suggest that plants prefer to reduce sales to domestic buyers more than foreign buyers and purchases from foreign rather than domestic suppliers. We also find some evidence of a negative indirect effect on turnover through spillovers from customers and a positive effect through damage to very nearby competitors.
Original languageEnglish
Article number102252
JournalJournal of Environmental Economics and Management
Early online date17 Aug 2019
Publication statusPublished - Nov 2019

Bibliographical note

Funding Information:
We would like to thank participants at the “Cities and the Environment” workshop in Potsdam, July 2018, seminar participants at the University of Manchester and the AERE conference, Lake Tahoe, 2019. All remaining errors are our own.

Publisher Copyright:
© 2019 Elsevier Inc.


  • China
  • Economic impact
  • Plants
  • Typhoons
  • Wind field model

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law


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