Discussion Papers 2017

CIRJE-F-1051	"Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923"
Author Name	Okazaki, Tetsuji, Toshihiro Okubo and Eric Strobl
Date	June 2017
Full Paper	PDF file
Remarks

Abstract
The Great Kanto Earthquake occurred on September 1st 1923 and induced serious damage on Yokohama City as well as Tokyo city. For example, about 90⅞ of factories in Yokohama City were burnt down. However, these manufacturing industries in Yokohama City appear to have recovered from the damage swiftly. This paper investigates the existence of creative destruction due to the Great Kanto Earthquake. Using firm level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction in Yokohama city. Larger firms tend to increase their capital more in seriously damaged areas.
Keywords: natural disaster, creative destruction, capital, damage index, Great Kanto

Abstract

The Great Kanto Earthquake occurred on September 1st 1923 and induced serious damage on Yokohama City as well as Tokyo city. For example, about 90⅞ of factories in Yokohama City were burnt down. However, these manufacturing industries in Yokohama City appear to have recovered from the damage swiftly. This paper investigates the existence of creative destruction due to the Great Kanto Earthquake. Using firm level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction in Yokohama city. Larger firms tend to increase their capital more in seriously damaged areas.

Keywords: natural disaster, creative destruction, capital, damage index, Great Kanto