5. Economic Ripple Effects of Choice Factors and Disaster-Related Investments at Nagoya Port

The overall impact of disasters on local economies varies in the extent and absolute severity of the damage sustained depending on the scale of the disaster, the level of production activity, and the local industrial structure. In Chapter 5, I attempt to identify factors that affect companies' decisions to use a port such as Nagoya and to review circumstances that might lead to changes of choice, including options of ports in other areas. I will focus particularly in this study on factors relating to natural disasters and countermeasures, first summarizing the investments required to ensure the port’s safety and resilience against risks of major disasters and then analyzing the further impact they have on the Nagoya region. The results of the initial survey show that the factors most important in favoring the choice of Nagoya for exports are lower logistics costs, lower domestic transport costs to the port and lower port costs overall. For imports through Nagoya, the factors of importance are similarly lower domestic transport costs from the port and lower total port costs. For the contingency of some natural disaster making the port at Nagoya unavailable, many local companies would consider a change to Osaka or Kobe, but those without any plan for an alternative account for as much as 59% of the total. The analysis of the local economic ripple effects of port disaster prevention projects shows that the production inducement coefficient of these is 1.5 for the local prefecture (Aichi), as compared with 1.9 for the rest of Japan. The total employment effect as projected in the 2012 Aichi Prefecture budget is a plus of 1,616 jobs.