Abstract
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.
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Notes
- 1.
Machinery goods are composed of general machinery, electrical machinery, transport equipment, and precision machinery (see Ando and Kimura (2012) for the definition of machinery parts and components). Machinery final products are defined as machinery goods other than machinery parts and components. Automobiles are final products only in HS87.
- 2.
East Asia in this chapter includes the following 14 countries/economies: Association of South-East Asian Nations (ASEAN) 10, China, Korea, Hong Kong, and Taiwan.
- 3.
- 4.
EU refers to the EU27 in this chapter.
- 5.
The decomposition of changes in trade into extensive and intensive margins may change when data at a different level of disaggregation are used. For instance, the results based on data at the most disaggregated level (HS 9-digit level in the case of Japan) may be more likely to make the extensive margins appear larger than the results based on data at more aggregated levels such as the HS 6-digit level. Also, if we use some cutoff point to identify the extensive margins, the results may change. However, the major findings discussed here do not change even if we use different levels of aggregation.
- 6.
Some countries in the Middle East imposed import prohibition on any agriculture and food products produced in Japan, regardless of where they were produced in Japan. Such strict trade restrictions should directly influence the number of exported products.
- 7.
Indices of industrial production and regional input-output tables are available from the following websites, respectively;
http://www.meti.go.jp/english/statistics/tyo/iip/index.html, and
http://www.meti.go.jp/statistics/tyo/tiikiio/result/result_02.html.
- 8.
The disaster areas in this figure are the designated regions to which the Disaster Relief Act may apply.
- 9.
See Ministry of Economy and Trade, Industry (METI) (2012) for the detailed analysis of industrial activities in F/Y2011.
- 10.
See Ando et al. (2009) for the two-dimensional fragmentation and their costs in terms of fixed costs, services link costs, and production cost per se.
References
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© 2015 Economic Research Institute for ASEAN and East Asia (ERIA)
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Ando, M. (2015). Impact of Recent Crises and Disasters on Regional Production Networks and Trade in Japan. In: Aldrich, D., Oum, S., Sawada, Y. (eds) Resilience and Recovery in Asian Disasters. Risk, Governance and Society, vol 18. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55022-8_6
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DOI: https://doi.org/10.1007/978-4-431-55022-8_6
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