| Author Name | UESUGI Iichiro (Faculty Fellow, RIETI) /UCHIDA Hirofumi (Kobe University) /UCHINO Taisuke (Fellow, RIETI) /ONO Arito (Mizuho Research Institute)/HAZAMA Makoto (Hitotsubashi University)/HOSONO Kaoru (Gakushuin University)/MIYAKAWA Daisuke (Development Bank of Japan) |
|---|---|
| Creation Date/NO. | January 2012 12-P-001 |
| Research Project | Research on Efficient Corporate Financing and Inter-firm Networks |
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Abstract
We study the impact of the Great Hanshin-Awaji Earthquake on firm dynamics and obtain implications for the recent Great East Japan Earthquake. By using unique micro-level data for a maximum of 90,000 firms, we examine the impact of the earthquake on firms' default, relocation, and investment activities to find the following. First, default probabilities are higher for quake-stricken firms that had transaction relationships with quake-stricken financial institutions than those that had no such relationships. Second, relocation probabilities are higher among quake-stricken firms that belong to agglomerated industries than those that do not. Note, however, that relocation distances for about half of those that actually relocated are small and are no greater than one kilometer. Third, the amount of investment increase after the earthquake is significantly smaller for quake-stricken firms that had transaction relationships with quake-stricken financial institutions than those that had no such relationships.
