The Bright and Dark Sides of a Central Bank's Financial Support to Local Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan

Tetsuji Okazaki; Toshihiro Okubo; Eric Strobl

doi:10.1111/jmcb.13018

The Bright and Dark Sides of a Central Bank's Financial Support to Local Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan

Tetsuji Okazaki, Toshihiro Okubo, Eric Strobl

Economics

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

The Great Kanto Earthquake of 1923 caused serious damage to firms and banks in Yokohama City. We explore the role of the financial support by the Bank of Japan (BoJ) through local banks in a firm's survival and recovery from the natural disaster. We find that the small- and medium-sized firms (SMEs) that had a relatively large correspondent bank with a large number of bills rediscounted by BoJ had a higher likelihood of survival but lower growth after the earthquake. Liquidity supply by the central bank for recovery from a negative shock can have both positive and negative impacts.

Original language	English
Journal	Journal of Money, Credit and Banking
Early online date	7 Feb 2023
DOIs	https://doi.org/10.1111/jmcb.13018
Publication status	E-pub ahead of print - 7 Feb 2023

Bibliographical note

Publisher Copyright:
© 2023 The Ohio State University.

Keywords

Bank of Japan (BoJ)
building damage
earthquake bills
firm–bank relationship
Great Kanto Earthquake
SME
Yokohama City

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1111/jmcb.13018

Cite this

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title = "The Bright and Dark Sides of a Central Bank's Financial Support to Local Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan",

abstract = "The Great Kanto Earthquake of 1923 caused serious damage to firms and banks in Yokohama City. We explore the role of the financial support by the Bank of Japan (BoJ) through local banks in a firm's survival and recovery from the natural disaster. We find that the small- and medium-sized firms (SMEs) that had a relatively large correspondent bank with a large number of bills rediscounted by BoJ had a higher likelihood of survival but lower growth after the earthquake. Liquidity supply by the central bank for recovery from a negative shock can have both positive and negative impacts.",

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N2 - The Great Kanto Earthquake of 1923 caused serious damage to firms and banks in Yokohama City. We explore the role of the financial support by the Bank of Japan (BoJ) through local banks in a firm's survival and recovery from the natural disaster. We find that the small- and medium-sized firms (SMEs) that had a relatively large correspondent bank with a large number of bills rediscounted by BoJ had a higher likelihood of survival but lower growth after the earthquake. Liquidity supply by the central bank for recovery from a negative shock can have both positive and negative impacts.

AB - The Great Kanto Earthquake of 1923 caused serious damage to firms and banks in Yokohama City. We explore the role of the financial support by the Bank of Japan (BoJ) through local banks in a firm's survival and recovery from the natural disaster. We find that the small- and medium-sized firms (SMEs) that had a relatively large correspondent bank with a large number of bills rediscounted by BoJ had a higher likelihood of survival but lower growth after the earthquake. Liquidity supply by the central bank for recovery from a negative shock can have both positive and negative impacts.

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ER -

The Bright and Dark Sides of a Central Bank's Financial Support to Local Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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