Impact of Natural Disasters on Industrial Agglomeration: The Case of the 1923 Great Kanto Earthquake


Event details


Date & time

Tuesday 06 July 2010


Lennox Room, Level 1, JG Crawford Building 132, Lennox Crossing, ANU


Prof Tetsuji Okazaki, Economics Department, Tokyo University


Meg Sato
6125 7247
Since the 1990s, New Economic Geography (NEG) has argued that a temporary shock can create a persistent impact on geographic distribution of economic activities because of multiple equilibria. This paper, investigates the long-run impact of a temporary shock on the geographic distribution of industries in Tokyo, using the 1923 Great Kanto Earthquake as a natural experiment. It reveals that the shock from the Earthquake left a persistent impact on the geographic distribution of industries. Even after controlling for policy variables, particularly zoning, a large part of the impact was still evident in 1936. This result is basically robust if we examine the persistence of industries. In addition, through industry-level investigation, it is found that persistence was especially significant for the machinery and metal industry, and relatively weak for the textile industry. This finding suggests the importance of the industrial structure and transaction networks within industry as the mechanisms determining geographic distribution of industries.

Professor Okazaki is a prominent Japanese Economic Historian at the Economics department, University of Tokyo. He has been working on institutional analysis of the Japanese economic development. That is, he has investigated on the Japanese war-economy during the Second World War, analysed the role of industrial policies in postwar Japan, specifically foreign exchange allocation, coordination of investment through the deliberative councils using original documents and micro-data, and re-examined zaibatsu in early twentieth century and merchant coalitions in nineteenth century. His research has implications to the modern economy and his research is known world wide. He has been published in journals such as Economic History Review, Explorations in Economic History, Journal of Economic History and the International Journal of Industrial Organization.

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