Propagation of positive effects of postdisaster policies through supply chains: Evidence from the great East Japan earthquake and tsunami

This study evaluates the impact of “group subsidies,” a policy intervention to repair and reinstall damaged capital goods and facilities of small and medium-sized enterprises after the Great East Japan earthquake.

A positive effect of the subsidies on small recipient firms’ postdisaster sales and employment was found in the study. There was also a positive indirect effect of the group subsidies on firms in disaster-hit prefectures that did not receive any group subsidy but were linked through supply chains with a recipient firm. The results indicate the propagation of postdisaster policy effects through supply chains.