How did the Japanese Exports Respond to Two Crises in the International Production Networks? The Global Financial Crisis and the Great East Japan Earthquake

Abstract

This paper analyzes the impact of two massive shocks on Japanese exports, the 2008–2009 Global Financial Crisis and the 2011 Great East Japan Earthquake, focusing on the characteristics of domestic/international production networks in machinery industries. Using monthly data for Japanese bilateral exports at the most disaggregated level, the paper decomposes the fall and recovery of Japanese exports into intensive and extensive margins. It also examines the exit and re‐entry of exports using logit estimation and survival analysis. The experience after both shocks confirms the stability and robustness of production networks and the enhancing link with East Asia. However, differences between the two shocks seem to generate differential impacts on corporate behavior.