Supply Chain Disruptions: Evidence from the Great East Japan Earthquake*

By Vasco M. Carvalho, Makoto Nirei, Yukiko U. Saito, Alireza Tahbaz-Salehi. Quarterly Journal of Economics, 2016

845 citations recorded by the source corpus.

Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this article provides a quantification of the role of input-output linkages as a mechanism for the propagation and amplification of shocks. We document that the disruption caused by the disaster propagated upstream and downstream along supply chains, affecting the direct and indirect suppliers and customers of disaster-stricken firms. Using a general equilibrium model of production networks, we then obtain an estimate for the overall macroeconomic impact of the disaster by taking these propagation effects into account. We find that the earthquake and its aftermaths resulted in a 0.47 percentage point decline in Japan’s real GDP growth in the year following the disaster.

Subfields: Economics and Econometrics, Soil Science, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/adc131ea3c1b4afdbbb318721d3faeecbfd809cd

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Citations in the corpus

Pirates without Borders: The Propagation of Cyberattacks through Firms’ Supply Chains (2020, neutral): “(5)Boehm, Flaaen and Pandalai-Nayar (2019) exploit an earthquake in Japan and estimate a near zero elasticity of substitution of intermediate goods in the short-run, while Carvalho et al. (2021) use the same”
Climate risk and financial stability in the network of banks and investment funds (2020, neutral): “Moreover, given the interconnectedness of today’s business, these enhanced metrics of risk and impact need to be based on network models of both investment chains and supply chains, Nuss et al. (2016) and Carvalho et al. (2016).”
Identification in Macroeconomics (2017, background): “ment; Beraja, Hurst, and Ospina (2016) on wage rigidity during the Great Recession; Martin and Philippon (2017) on the effects of debt during the Great Recession in the eurozone; Carvalho et al. (2016) on supply chain disruptions after the Great East Japan Earthquake of 2011; and a large literature ”
COVID‐19 and Supply Chain Disruption: Evidence from Food Markets in India† (2020, background): “Carvalho et al. (2016) provide evidence for the role of input–output linkages in supply chain disruptions after the Great East Japan earthquake using firm-level data.”
Networks and Trade (2018, methodology): “For example, Carvalho et al. (2016) and Boehm et al. (2016) use the Japanese Tohoku earthquake in 2011, while Barrot and Sauvagnat (2016) use U.S. natural disasters over a 30-year period, to identify idiosyncratic shocks to firms and their propagation through the supply chain.”
Networks, Barriers, and Trade (2019, neutral): “For instance, Long and Plosser (1983), Acemoglu et al. (2012), Atalay (2017), Carvalho et al. (2016), Baqaee and Farhi (2017a,b), Baqaee (2018), Carvalho and Tahbaz-Salehi (2018), Liu (2017), among others.”
Climate Change and Adaptation in Global Supply-Chain Networks (2019, background): “Previous research (e.g. Barrot and Sauvagnat, 2016; Carvalho et al., 2021) has documented performance spillovers along the supply chain following large-scale natural disasters.”