Advertisement

Economic Analysis of Regional Renewal and Recovery from the Great East Japan Earthquake

  • Suminori TokunagaEmail author
  • Maria Ikegawa
  • Mitsuru Okiyama
Chapter
  • 299 Downloads
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 11)

Abstract

The Great East Japan Earthquake, which struck on March 11, 2011, had a massive economic impact, primarily on the affected areas in Japan. In this chapter, we examine the economic and human damage inflicted on Iwate, Miyagi, Fukushima, and Ibaraki Prefectures by the Great East Japan Earthquake, as well as the current situation of industrial recovery, based on several statistical sources and a geographically weighted regression (GWR) model. In the latter part of this chapter, we will show the extent of fiscal transfers to date from the government for reconstruction and renewal of stricken areas and analyze the economic effect of the formation of new industrial clusters for reconstruction and renewal on these areas using a static two-regional computable general equilibrium (2SCGE) model. Our findings are as follows: (1) if production subsidies to support industries form new industry clusters, positive effects on regional economies could appear in the disaster regions; however, these impacts are weak and (2) formation of new industry clusters with productivity improvement has a positive effect on real gross regional product (GRP) and economic welfare in these regions, reducing the economic welfare gap between disaster and non-disaster regions.

Keywords

Great East Japan Earthquake Economic and human damage Geographically weighted regression (GWR) model Two-regional computable general equilibrium (2SCGE) model New economic geography (NEG) model New industry clusters New industrial agglomeration 

References

  1. Anselin L (1988) Spatial econometrics: methods and models. Kluwer Academic Publishers, DordrechtCrossRefGoogle Scholar
  2. Arbia G (2014) A primer for spatial econometrics: with application in R. Palgrave Macmillan, HampshireCrossRefGoogle Scholar
  3. Baldwin R, Krugman P (2004) Agglomeration, integration and tax harmonization. Eur Econ Rev 48:1–23CrossRefGoogle Scholar
  4. Belleflamme P, Picard P, Thisse J (2000) An economic theory of regional clusters. J Urban Econ 48:158–184CrossRefGoogle Scholar
  5. Cabinet Office (2014a) Basic policies for the economic and fiscal management and reform 2014-from deflation to an expanded economic virtuous cycle (in Japanese). http://www5.cao.go.jp/keizai-shimon/kaigi/minutes/2014/0624/shiryo_01.pdf
  6. Cabinet Office (2014b) Japan revitalization strategy as revised in 2014 (in Japanese). http://www5.cao.go.jp/keizai-shimon/kaigi/minutes/2014/0624/shiryo_02_1.pdf
  7. Dixit A, Stiglitz J (1977) Monopolistic competition and optimal product diversity. Am Econ Rev 67(3):297–308Google Scholar
  8. Dixon PB, Rimmer MT (2002) Dynamic general equilibrium modeling for forecasting and policy. North-Holland, AmsterdamGoogle Scholar
  9. Duranton G, Martin P, Mayer T, Mayneris F (2010) The economics of clusters. Oxford University Press, OxfordCrossRefGoogle Scholar
  10. EcoMod Modeling School (2012) Advanced techniques in cge modeling with gams global economic modeling network, Singapore, January 9–13Google Scholar
  11. Ellison G, Glaeser EL (1997) Geographic concentration in U.S. manufacturing industries: a dartboard approach. J Polit Econ 105(5):898–927CrossRefGoogle Scholar
  12. Fujimoto T (2011) Supply chain competitiveness and robustness: a lesson from the 2011 Tohoku Earthquake and ‘Virtual dualization.’ MRC (Tokyo University Manufacturing Management Research Center) Discussion Paper Series, 354 (in Japanese)Google Scholar
  13. Fujita M, Hamaguchi N (2011) Japan and economic integration in East Asia: post-disaster scenario. RIETI Discussion Paper Series, 11-E-079Google Scholar
  14. Fujita M, Hamaguchi N (2014) Supply chain internationalization in East Asia: inclusiveness and risk. RIETI Discussion Paper Series, 14-E-066Google Scholar
  15. Fujita M, Thisse J (2002, 2013) Economics of agglomeration: cities, industrial location, and globalization, 2nd edn. Cambridge University Press, New YorkGoogle Scholar
  16. Fujita M, Krugman P, Venables AJ (1999) The spatial economy: cities, regions, and international trade. MIT Press, CambridgeGoogle Scholar
  17. Hamaguchi N (2013) Impact of the great East Japan earthquake on local industries: synthesis and analysis from a survey. RIETI Discussion Policy Discussion Paper Series, 13-P-001 (in Japanese)Google Scholar
  18. Head K, Mayer T (2004) Market potential and the location of Japanese investment in the European union. Rev Econ Stat 86(4):959–972CrossRefGoogle Scholar
  19. Helpman E, Krugman P (1985) Market structure and foreign trade. MIT Press, CambridgeGoogle Scholar
  20. Henderson JV (1988) Urban development: theory, fact and illusion. Oxford University Press, OxfordGoogle Scholar
  21. Hosoe N, Gasawa K, Hashimoto H (2010) Textbook of computable general equilibrium modeling. Palgrave Macmillan, New YorkCrossRefGoogle Scholar
  22. Ishikawa Y (2014) Economic impacts of population decline due to the great East Japan earthquake using an inter-regional input-output approach. In: Tokunaga S, Okiyama M (eds) Reconstruction the disaster-affected region of the great East Japan earthquake and recovery of the regional economy. Bunshindou, Tokyo, pp 219–238. (in Japanese)Google Scholar
  23. Ito H (2008) Interregional SAM model and structure path analysis focusing on institution sector. J Commer Sci Kwansei Gakuin Univ 56(1):33–70. (in Japanese)Google Scholar
  24. Jacobs J (1969) The economy of cities. Random House, New YorkGoogle Scholar
  25. Japan Center for Economic Research (2015) Potential economic collapse in the late 2020s- adverse effects of the declining population after the Tokyo olympics. 42nd medium-term forecast for the Japanese economy: FY2035-FY2030 (Baseline Scenario)Google Scholar
  26. Japan Institute for Labor Policy and Training (2014) Labor supply and demand estimates: policy simulations based on the labor supply and demand model (2013). Research Material Series129 (in Japanese)Google Scholar
  27. Kageyama M, Tokunaga S (2006) An empirical analysis of co-agglomeration effect in the japanese food industry. J Rural Econ Spec Issue 2006:132–138. (in Japanese)Google Scholar
  28. Karan PP, Suganuma U (eds) (2016) Japan after 3/11: global perspectives on the earthquake, tsunami, and fukushima meltdown. University Press of Kentucky, KentuckyGoogle Scholar
  29. Kehoe TJ, Srinivasan TN, Whalley J (2005) Frontiers in applied general equilibrium modeling. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  30. Kiminami L, Nakamura T (eds) (2016) Food security and industrial clustering in Northeast Asia. Springer Japan, TokyoGoogle Scholar
  31. Krugman P (1980) Scale economies, product differentiation, and the pattern of trade. Am Econ Rev 70:950–959Google Scholar
  32. Krugman P (1991) Increasing returns and economic geography. J Polit Econ 99:483–499CrossRefGoogle Scholar
  33. Kuchiki A, Tsuji M (eds) (2005) Industrial clusters in Asia: analyses of their competition and cooperation. Palgrave Macmillan, New YorkGoogle Scholar
  34. LeSage J, Pace PK (2009) Introduction to spatial econometrics. CRC Press, Boca RatonCrossRefGoogle Scholar
  35. Marshall A (1890) Principles of economics, 8th edn. Macmillan, London. Published in 1920Google Scholar
  36. McCann P (2013) Modern urban and regional economics. Oxford University Press, OxfordGoogle Scholar
  37. Miller R, Blair P (2009) Input-output analysis: foundations and extensions, second edn. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  38. Ministry of Agriculture, Forestry and Fisheries (2015) Survey result 2014 about management condition of farmworker and fisherman in tsunami-disaster area by the great East Japan Earthquake (in Japanese). http://www.maff.go.jp/j/tokei/keikou/pdf/fukkou-20150911.pdf
  39. Ministry of Agriculture, Forestry and Fisheries (2016) Commitment for reconstruction support of agriculture, forestry and fisheries after the great East Japan earthquake (in Japanese). http://www.maff.go.jp/j/kanbo/kihyo02/fukkou/pdf/1603-zen.pdf
  40. Ministry of Economy, Trade and Industry (2011) Survey of the Fukushima Dai-ichi Nuclear Power Plant incident (in Japanese)Google Scholar
  41. Mokudai T, Ishiro K (2013) The current situation and challenges facing automobile industry in Kyushu. In: Orihashi S, Mokudai T, Murayama T (eds) Tohoku region and automobile industry. Soseisha, Tokyo, pp 168–186. (in Japanese)Google Scholar
  42. Mori T, Smith T (2011) An industrial agglomeration approach to central place and city size regularities. J Reg Sci 51(4):694–731CrossRefGoogle Scholar
  43. Mori T, Nishikimi K, Smith T (2005) A divergence statistic for industrial localization. Rev Econ Stat 87(4):635–651CrossRefGoogle Scholar
  44. Murayama T (2013) Automobile industry promotion by industry-academia-government collaboration in Iwate. In: Orihashi S, Mokudai T, Murayama T (eds) Tohoku region and automobile industry. Soseisha, Tokyo, pp 62–107. (in Japanese)Google Scholar
  45. Nakajima K (2008) Economic division and spatial relocation: the case of postwar Japan. Journal of the Japanese and International Economies 22:383–400CrossRefGoogle Scholar
  46. Nakamura R (1985) Agglomeration economies in urban manufacturing industry. J Urban Econ 17:108–124CrossRefGoogle Scholar
  47. National Institute of Population and Social Security Research in Japan (2013) Regional population projections for Japan: 2010–2040. Population Research Series (in Japanese). http://www.ipss.go.jp/pp-shicyoson/j/shicyoson13/6houkoku/houkoku.pdf
  48. Nemoto T (2012) Vitalizing local economies through supply chain restoration. Plann Adm 35(2):13–16. (in Japanese)Google Scholar
  49. Okiyama M, Tokunaga S, Akune Y (2014) Analysis of the effective source of revenue to reconstruct the disaster- affected region of the great East Japan earthquake: utilizing the two–regional CGE model. J Appl Reg Sci 18:1–16. (in Japanese)Google Scholar
  50. Okubo T, Picard P, Thisse J (2010) The spatial selection of heterogeneous firms. J Int Econ 82:230–237CrossRefGoogle Scholar
  51. Okuyama Y (2004) Modeling spatial and economic impacts of an earthquake: input-output approaches. Disaster Prev Manag 13(4):297–306CrossRefGoogle Scholar
  52. Orihashi S (2013) The problem for the development of automobile industry in Tohoku. In: Orihashi S, Mokudai T, Murayama T (eds) Tohoku region and automobile industry. Soseisha, Tokyo, pp 248–258. (in Japanese)Google Scholar
  53. Otsuka T, Ichikawa Y (2011) How do you evaluate Japan-type supply Chain? A collection of theses of Mizuho Research Institute 3 (in Japanese)Google Scholar
  54. Ottaviano G, Tabuchi T, Thisse J (2002) Agglomeration and trade revisited. Int Econ Rev 43:409–436CrossRefGoogle Scholar
  55. Porter M (1998) Clusters and competition: new agendas for companies, governments, institutions. In: On competition. Harvard Business School Press, Boston, pp 155–196Google Scholar
  56. Porter M (2000) Location, competition, and economic development: local clusters in a global economy. Econ Dev Q 14(1):15–34CrossRefGoogle Scholar
  57. Reconstruction Agency (2012, 2013, 2014, 2015, 2016) Current state and initiatives for reconstruction. 2012–2016 (in Japanese)Google Scholar
  58. Saito M (2015) Political economy for reconstruction of the earthquake disaster. Japan: Nippon Hyoron Sha (in Japanese)Google Scholar
  59. Saito (Umeno) Y (2012) Impact of East Japan earthquake disaster on companies in non-affected area: the structure of Inter-company network of supply chain and its implication. J JSS 42(1):135–144. (in Japanese)Google Scholar
  60. Shibusawa H, Miyata Y (2011) Evaluating the dynamic and spatial economic impacts of an earthquake: a CGE application to Japan. Reg Sci Inq 3(2):13–25Google Scholar
  61. Tabuchi T (2014) Historical trend of agglomeration to the capital region and new economic geography. Reg Sci Urban Econ 44:50–59CrossRefGoogle Scholar
  62. Tabuchi T, Thisse T (2002) Taste heterogeneity, labor mobility and economic geography. J Dev Econ 69:155–177CrossRefGoogle Scholar
  63. Tabuchi T, Thisse T (2011) A new economic geography model of central places. J Urban Econ 69:240–252CrossRefGoogle Scholar
  64. Takatsuka H, Zeng D (2012) Trade liberalization and welfare: differentiated-good versus homogeneous-good markets. J Jpn Int Econ 26:308–325CrossRefGoogle Scholar
  65. Tawada M, Iemori N (2005) Industrial clusters of Tokai region and financial structure. Cyuou Keizai Sha (in Japanese)Google Scholar
  66. Todo Y, Nakajima K, Matous P (2013) How do supply chain networks affect the resilience of firms to natural disasters? Evidence from the great East Japan earthquake. RIETI Policy Discussion Paper Series, 13-E-028Google Scholar
  67. Tohoku Bureau of Economy, Trade and Industry (2012, 2013, 2014, 2015, 2016) Economic survey. (in Japanese)Google Scholar
  68. Tohoku Bureau of Economy, Trade and Industry (2013) Survey of recipients of group subsidies. (in Japanese)Google Scholar
  69. Tokui J, Arai N, Kawasaki K, Miyagawa T, Fukao K, Arai S, Edamura K, Kodama N, Noguchi N (2012) Economic impacts of the great East-Japan earthquake: comparison with the past great disasters, supply chain disruption, and effect of supply constraints in electric utility. RIETI policy discussion paper series, 12-P-004 (in Japanese)Google Scholar
  70. Tokui J, Kawasaki K, Miyagawa T (2015) The economic impact of supply chain disruptions from the great East Japan earthquake. RIETI discussion paper series, 15-E-094Google Scholar
  71. Tokunaga S, Kageyama M (2008) Impacts of agglomeration and co-agglomeration effects on production in the Japanese manufacturing industry: using flexible translog production function. Studies in Regional Science 38(2):331–337CrossRefGoogle Scholar
  72. Tokunaga S, Okiyama M (eds) (2014) Reconstruction the disaster-affected region of the great East Japan earthquake and recovery of the regional economy. Bunshindou, Tokyo. (in Japanese)Google Scholar
  73. Tokunaga S, Resosudarmo BP, Wuryanto LE, Dung NT (2003) An inter-regional cge model to assess the impacts of tariff reduction and fiscal decentralization on regional economy. Stud Reg Sci 33(2):1–25CrossRefGoogle Scholar
  74. Tokunaga S, Kageyama M, Akune Y, Nakamura R (2014) Empirical analyses of agglomeration economies in Japanese assembly-type manufacturing industry for 1985–2000: using agglomeration and coagglomeration indices. Rev Urban Reg Dev Stud 26(1):57–79CrossRefGoogle Scholar
  75. Venables A (1996) Equilibrium locations of vertically linked industries. Int Econ Rev 37:341–359CrossRefGoogle Scholar
  76. Xie W, Li N, Wu J-D, Hao X-L (2014) Modeling the economic costs of disasters and recovery. Nat Hazards Earth Syst Sci 14:757–772CrossRefGoogle Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2017

Authors and Affiliations

  • Suminori Tokunaga
    • 1
    • 2
    Email author
  • Maria Ikegawa
    • 3
  • Mitsuru Okiyama
    • 4
  1. 1.Faculty of Economics and Business AdministrationReitaku UniversityChibaJapan
  2. 2.University of TsukubaTsukubaJapan
  3. 3.Policy Research Institute, Ministry of Agriculture, Forestry and FisheriesTokyoJapan
  4. 4.Reitaku Institute of Political Economics and Social StudiesReitaku UniversityKashiwa, ChibaJapan

Personalised recommendations