Perception Gaps and Proactive Strategy in Japanese SME Disaster Recovery

This paper examines the post-disaster effectiveness of countermeasures available to Japanese SMEs. Based on a unique survey of over 3,500 SMEs, we document a stark disconnect: subjective evaluations of property insurance are lowest for earthquakes but highest for storms—a ranking that reverses for public relief and loans, likely reflecting differences in the predictability of disaster classes. These perceptions, however, correlate weakly with objective accounting measures. Crucially, despite these perceptual mismatches and the inherent noise in SME accounting data, proactive strategic changes yield robust, positive financial results. Furthermore, Business Continuity Plans (BCPs) generally function effectively in reducing the likelihood of business interruption. Ultimately, while policy interventions must be tailored to specific disaster types, our findings highlight proactive strategic adaptation as the critical driver of SME recovery.