Running Head: DISASTERS AND TRADE 1 Disasters and Trade Student’s Name Institutional Affiliation DISASTERS AND TRADE 2 Disasters and Trade Article 1 This article by Hosono et al. (2016) shows the effects of the lending capacities of banks on the investments of various firms. The main aim of the author is to show the reader the main loan supply shocks that may be identified when utilizing a study on the experiment of the Great Hanshin-Awaji earthquake that took place in Japan in the year 1995. This source can be trusted by any researcher willing to use this article for research about natural disasters and how they affect the ability of banks to offer loans and the availability of investments by different firms in such situations. This article, however, presents certain biases that are likely to be realized, especially lack of clear explanations of how the banks choose which firms to offer a loan after a natural disaster hits an area (Hosono et al., 2016). The most interesting aspect of this article is that the ratios of investment of different firms that are located outside areas that are affected by earthquakes are more than the areas found inside the earthquake areas. This aspect creates a need for the firms affected to seek help investing, which forms the basis of the article. Article 2 This article by Parsons (2016) shows how Hurricane Katrina, a natural disaster that took place in the United States, affected the trade of the country tremendously. The article explains how disasters and trade have been handled in the past, although such disasters do not have major effects in developed countries. This article can be trusted for research because the author uses it to expound on the known literature about natural disasters and how they affect trade by focusing on the Hurricane Katrina and how the United States’ trade was affected. This article is likely to have certain shortcomings explaining how, despite the United States being developed hence no serious effects were realized from the disaster, the private sector and the small scale business DISASTERS AND TRADE 3 were affected (Parsons, 2016). The most interesting explanation in this article is that it estimates the relationship between the demand for imports in the affected areas during the disaster and how the demands were handled. Article 3 This article by Oh (2017) explains the influence that natural disasters have on international trade. The article is a reliable source that should be trusted because the author uses an equation model that helps to explain different types of disasters such as natural disasters, politics and the risks it has, financial crisis and disasters experienced from technology. The author explains that the effects of the various types of disasters are different depending on the status of the areas affected. Terrorism activities are facilitated by technology, and this creates an increase in international trade especially between developed countries. The possible shortcoming likely to be found in this article is that the author may not research several areas to formulate results for discussion. Rather the areas studied are limited which might create biased information (Oh, 2017). The most interesting aspect of this article is that it uses results from both the country and the industries to explain how various disasters reduce the flow of international trade. DISASTERS AND TRADE 4 References Hosono, K., Miyakawa, D., Uchino, T., Hazama, M., Ono, A., Uchida, H., & Uesugi, I. (2016). Natural Disasters, Damage to Banks, and Firm Investment. International Economic Review, 57(4), 1335–1370. https://doi.org/10.1111/iere.12200 Oh, C. H. (2017). How do natural and man-made disasters affect international trade? A countrylevel and industry-level analysis. Journal of Risk Research, 20(2), 195– 217. https://doi.org/10.1080/13669877.2015.1042496 Parsons, C. (2016). Disasters and trade: did Hurricane Katrina affect US imports? International Economics & Economic Policy, 13(2), 177–194. https://doi.org/10.1007/s10368-0140296-5
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