Impact of recent crises and disasters on regional production networks and trade in japan

This chapter sheds light on Japanese production networks and markets in machinery industries during crisis, focusing on the effects of the economic crisis and 3.11 disaster from the viewpoint of Japan's exports. The chapter first decomposes changes in machinery exports into extensive and intensive margins and then examines the probability of trade declines and recoveries in order to capture the natures of international production/distribution networks under the crises (the 2008-2009 Global Financial Crisis and the 2011 Great East Japan Earthquake). It also discusses domestic activities as well as the impacts of the 2011 Thailand floods. Moreover, considering that the 2011 earthquake was not only a natural disaster but also a technological disaster that seriously affected Japan's agriculture and food exports, I also investigate its impact on exports. Whether demand shock or supply shock, disasters and crises revealed the stability and robustness of production networks in machinery sectors. However, their negative impacts are severe and transmitted through production networks at the beginning. I conclude with various policy implications from research on these crises.