Natural disasters and trade: The mitigating impact of port substitution

Masashige Hamano, Wessel N. Vermeulen*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


We study the effect of natural disasters on port-level exports. We model the interaction between firms and ports to study how strongly exports from one port are affected by changes in the cost of exporting at neighboring ports. We extend the standard trade model with heterogeneous firms to a multiple port structure where exporting is subject to port specific local transportation costs, port specific fixed export costs and international bilateral trade costs. We show that gravity distortion due to firm heterogeneity is conditional on the comparative advantage at the port level and resulting substitution of exports across ports. We present evidence of the substitution effect using the 2011 Great East Japan Earthquake, indicating that at least 40% of exports was substituted to other ports following the disaster. The substitution effect is the strongest in technology intensive product categories, which suggests an interaction between supply chains and domestic trade costs.

Original languageEnglish
Pages (from-to)809-856
Number of pages48
JournalJournal of Economic Geography
Issue number3
Publication statusPublished - 2021


  • Extensive margins
  • Firm heterogeneity
  • Fixed costs
  • Natural disasters
  • Transportation costs

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Economics and Econometrics


Dive into the research topics of 'Natural disasters and trade: The mitigating impact of port substitution'. Together they form a unique fingerprint.

Cite this