Abstract
In this paper we investigate whether destruction due to natural disasters induces industries to increase their regional production efficiency using the case of pre-war Japan, a setting of frequent disasters and technological upgrading. To this end we compile a regional sectoral dataset of natural disaster destruction and production for machinery and textiles. We then employ a stochastic frontier analysis (SFA) approach to estimate the role of disaster events on changes in production efficiency. Our results show that earthquakes led to increases in efficiency for both machinery and textiles, although they were substantially greater for textiles due to the recovery persisting longer. Overall earthquakes contributed 6.8% of efficiency gains in textiles and 3.1% in machinery. However, allowing events to compound in their impact showed that such gains were dampened when there were damaging earthquakes in subsequent years. In contrast, for climate-related natural disaster events there is only weak, if any, evidence that these played a significant role in determining productive efficiency.
| Original language | English |
|---|---|
| Pages (from-to) | 2054-2072 |
| Number of pages | 19 |
| Journal | Regional Studies |
| Volume | 57 |
| Issue number | 10 |
| Early online date | 24 Nov 2022 |
| DOIs | |
| Publication status | Published - 3 Oct 2023 |
Bibliographical note
Funding Information:This research was financed by a Grant-in-Aid for Scientific Research (JSPS) (grant numbers 16K03652 and 19H01487) (T. Okubo). The early version of this paper was published as a discussion paper (Mohan et al., 2020). We also thank an editor and two anonymous referees for helpful and excellent comments.
Publisher Copyright:
© 2022 Regional Studies Association.
Keywords
- earthquakes
- inefficiency scores
- natural disasters
- production efficiency
- stochastic frontier analysis
ASJC Scopus subject areas
- General Environmental Science
- General Social Sciences
