Determinants of the Reconstruction Period from the Great East Japan Earthquake: Evidence from manufacturing firms in Tohoku

Author Name WAKASUGI Ryuhei  (Faculty Fellow, RIETI) /TANAKA Ayumu  (Fellow, RIETI)
Creation Date/NO. February 2013 13-J-002
Research Project Study of the Creation of the Japanese Economy and Trade and Direct Investment
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This paper examines the factors that affect the period of firm reconstruction from the Great East Japan Earthquake, using RIETI's original survey of manufacturing firms suffering from the disaster in Tohoku. The estimated results show that cutting off of the supply chain prolonged the reconstruction period, in addition to such exogenous factors as cutting off of electric power, industrial water supply, and transport which hampered their reconstruction. Furthermore the estimated results, based on the quantile regression method which takes into account the different lengths of the reconstruction period, express that cutting off of the supply chain largely protracted the reconstruction period of firms which required a longer term for recovery, while cutting off of the electric power supply seriously affected the reconstruction of firms which required only a short period. This is a new finding. The fact that cutting off of the supply chain protracted the restoration period suggests the importance of "double-tracking of the supply chain" for minimizing the damage which industry may suffer from natural disasters, although we must be cautious in drawing a general policy implication from our analysis using the limited data.