Firm-level impacts of natural disasters on production networks: Evidence from a flood in Thailand

This paper explores the firm-level impact of the 2011 flooding in Thailand, specifically, the impact on procurement patterns at Japanese affiliates in Thailand. We find that, first, small firms are more likely to lower their local procurement share, especially their share of procurement from other Japanese-owned firms in Thailand. Second, young firms are more likely to increase their share of imports from Japan, whereas old firms are more likely to look to China. Third, there is no impact on imports from ASEAN and other countries. These findings are useful for uncovering how multinationals adjust their production networks before and after natural disasters.