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Propagation of economic shocks through global supply chains—Evidence from Hurricane Sandy
Author(s) -
Kashiwagi Yuzuka,
Todo Yasuyuki,
Matous Petr
Publication year - 2021
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12541
Subject(s) - natural disaster , shock (circulatory) , supply chain , economics , supply shock , demand shock , economic geography , economic impact analysis , natural resource economics , monetary economics , business , microeconomics , geography , meteorology , monetary policy , marketing , medicine
This study examines whether and how economic shocks from natural disasters propagate through supply chains to regions not directly hit by disasters. Although such propagation has been studied, less attention has been paid to heterogeneity across network characteristics of firms. Focusing on the impacts of a hurricane and using firm‐level data for major firms in the world that include supply‐chain ties among them, we find evidence of the intra‐national propagation of the shock in the United States. Our results further suggest that both input specificity and network density are important determinants of the level of propagation.