The Impact of Disasters on International Trade
WTO Staff Working Paper No. ERSD-2006-04
26 Pages Posted: 6 Apr 2006
Date Written: March 2006
Abstract
In this paper we examine the impact of major disasters on international trade flows using a gravity model. Our panel data consists of more than 170 countries for the years 1962-2004 yielding approximately 300,000 observations. We find that the driving forces determining the impact of such events are the democracy level and, to a lesser extent, the area of the affected country. The less democratic and the smaller a country the more are its trade flows reduced in case it is struck by a disaster. We are also able to distinguish between the effect of a disaster on an importing and an exporting country.
Keywords: International trade, disasters, gravity model, governance
JEL Classification: F14, P52, P48, C23
Suggested Citation: Suggested Citation
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