Firm-network characteristics and economic robustness to natural disasters

Journal article: This article proposes a theoretical framework to investigate economic robustness to exogenous shocks such as natural disasters. It is based on a dynamic model that represents a regional economy as a network of production units through the disaggregation of sector-scale input-output tables. Results suggest that disaster-related output losses depend on direct losses heterogeneity and on the economic network structure. Two aggregate indexes – concentration and clustering – appear as important drivers of economic robustness, offering opportunities for robustness-enhancing strategies. Modern industrial organization seems to reduce short-term robustness in a trade-off against higher efficiency in normal times. (C) 2011 Published by Elsevier B.V.

Author(s)

Fanny Henriet, Stéphane Hallegatte, Lionel Tabourier

Journal
  • Journal of Economic Dynamics and Control
Date of publication
  • 2012
Keywords JEL
C63 D85 L14 Q54
Keywords
  • Natural disasters
  • Economic impacts
  • Economic network
Pages
  • 150-167
Version
  • 1
Volume
  • 36