Abstract
The relationship between natural hazard-induced disasters and macroeconomic growth has been examined widely on global and national scales, but little research has been focused on the subnational level, especially in China. We examined the impacts of natural hazard-induced disasters on the regional growth in China based on subnational panel data for the period from 1990 to 2016. First, we used the number of people affected and the direct economic losses as the measures of the scale of disasters. Then, we used the direct damages of meteorological disasters and earthquakes as disaster measures separately to examine the impacts of different disaster types. Finally, we performed intraregional effects regressions to observe the spatial heterogeneity within the regions. The results show that the adverse short-term effects of disasters is most pronounced in the central region, while the direct damage of disasters is a positive stimulus of growth in the whole of China. However, this stimulus is observed in a lagged way and is reflected differently—meteorological disasters in central and eastern China and earthquakes in western China are related to regional growth. The results demonstrate that the short-term macroeconomic impacts of these disasters in the three geographical regions of China largely depend on regional economic development levels and the disaster types.
Highlights
There is a consensus that natural hazard-induced disasters pose a threat to the stable and sustainable development of society and its economic systems
The coefficient estimates for affected population (AFP) and its lagged values are reported in Columns (1a), (2a), and (3a), respectively, whereas the coefficient results for direct economic loss (DEL) and its lagged values are reported in the corresponding (b) columns
This implies that a 1% increase in the ratio of people affected to population is associated with a decrease in Gross Domestic Product (GDP) growth rate of 0.05. Such increases of stricken population and property losses in the central region bring the following year’s growth, though the coefficients for lagged measures are relatively small. Such lagged stimulus shows almost equal (80%) ‘‘resilience’’ when measured by either AFP or DEL [see Columns (2a) and (2b)]
Summary
There is a consensus that natural hazard-induced disasters pose a threat to the stable and sustainable development of society and its economic systems. The Wenchuan Earthquake of May 2008 in China, the Great East Japan Earthquake and Tsunami of March 2011, and the costly (USD 95 billion) Hurricane Harvey of August 2017 in the United States have shown alarming impacts of major disasters (UNISDR and CRED 2017). According to a report by the World Bank, the real cost of natural hazard-induced disasters to the global economy is a staggering USD 520 billion per year, with disasters pushing 26 million people into poverty every year (Hallegatte et al 2017). At a time when costs in human and financial terms ensue from climate shocks, disasters will continue to create new risks and disrupt government budgets, limiting development trends (UNISDR and CRED 2017). Studies about the relationship between disasters and economic development have attracted increasingly more attention (Sawada and Takasaki 2017)
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