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Author(s) Uchida, Hirofumi; Ono, Arito

Natural disasters, natural selection, and firm exit: lessons from the Tohoku earthquake

Source
Centre for Economic Policy Research
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Vox - CEPR's policy portal, February 2015:

This article investigates the extent to which disasters can lead to creative destruction through ‘natural selection’ of the fittest firms. It seems like natural disasters should harm the economy by destroying lives and capital. Surprisingly, the rate of closure due to bankruptcy decreases – perhaps due to aid. Firm exits following the Tohoku earthquake were predominantly voluntary closures, with firms seizing the moment in order to leave an ageing market.

Hirofumi Uchida, Arito Ono © voxEU.org

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Document links last validated on: 23 December 2019

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Hazards Earthquake
Themes Private sector Economics of DRR
Country and region Japan
Number of pages
online
Publication year
2015
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