Supply Chain Disruption and Import Strategy: Evidence from the Great East Japan Earthquake

Abstract

Global supply chain networks foster collaboration but accelerate cross-border risk transmission. This study investigates the effect of the 2011 East Japan earthquake on Chinese firms' import strategies. The findings reveal that the disruption led to a shift toward supply chain concentration, with firms reducing the diversification of import sources. There was a slight increase in the number of countries from which firms sourced imports but import shares became more concentrated, reflecting a reliance on fewer, centralized suppliers. Firms affected by the earthquake prioritized long-term partnerships and sought suppliers in regions with lower natural disaster risks, aiming to mitigate supply chain vulnerabilities and reduce switching costs. The findings also show that state-owned enterprises, private firms, and research and development-intensive firms were more inclined to centralize their import sources. This suggests that these firms, leveraging their larger scale, substantial resources, and robust risk management strategies, favored a more concentrated sourcing approach in order to better control their supply chains and ensure stability in the face of global disruptions.