Floods and the Duplication of Production: Evidence from the Global Car Industry
Authors: Michele Fioretti, Sophia Praetorius, Thierry Mayer
Abstract
Floods are becoming more frequent and can disrupt global supply chains. We study how multinational car makers adapt vehicle and key parts production to flood risk, and how their choices interact with insurance and public flood defences. Using plant-level data and a manually verified flood record in a staggered difference-in-differences design, we find that car makers duplicate production rather than move it away from flooded plants. Even more than five years after a flood, an engine is 19 percentage points more likely to be made in two or more plants, usually abroad and for cars assembled nearby, while the flooded plant's output shows no persistent decline beyond a temporary loss in the flood year. Firms duplicate only where adjustment costs are low, i.e. when a plant of theirs abroad already makes the same engine family. Flooded vehicle model versions are duplicated only temporarily, and transmission programs are not duplicated. Suggestive evidence that firms duplicate more where insurance is likely expensive and plants lack flood defences points to substitution between redundancy, insurance and public protection.
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Technology, Licensing and Multinational Production studies how automakers respond to local shocks, focusing on platform constraints and technology licensing rather than flood-driven production duplication.
Abstract
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Deep uncertainties in sea-level rise and storm surge projections examines infrastructure investment and coastal flood-risk decisions, not firms’ production responses to floods.
Abstract
Sea-levels are rising in many areas around the world, posing risks to coastal communities and infrastructures. Strategies for managing these flood risks present decision challenges that require a combination of geophysical, economic, and infrastructure models. Previous studies have broken important new ground on the considerable tensions between the costs of upgrading infrastructure and the damages that could result from extreme flood events. However, many risk-based adaptation strategies remain silent on certain potentially important uncertainties, as well as the trade-offs between competing objectives. Here, we implement and improve on a classic decision-analytical model (van Dantzig 1956)…
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Abstract
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Abstract
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Abstract
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Global Value Chains, Resilience and Strategic Behaviour examines import dependencies and industrial-policy choices as ways to strengthen value-chain resilience.
Abstract
In addressing risks to value chains, the choice of policy instrument matters and depends on institutional context. The role of fiscal policy in strengthening supply chain resilience has received increasing attention in recent years. We present empirical insights from India by estimating the extent of (critical) import dependencies for sectors like electrical machinery and equipment; machinery and mechanical appliances; organic chemicals; inorganic chemicals among others. In response to disruption risks affecting value chains, fiscal instruments could support resilience in multiple ways. In this paper we develop a game theoretic model to capture the industrial policy choices of the Government…
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Ranking the wrong places evaluates flood vulnerability rankings against realized losses and risk sharing, rather than firms’ production adjustments after floods.
Abstract
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AI-Guided Diversification of Green Technology Supply ChainsD. Erokhin · 2026 · Sustainability · Not summarized yet
AI-Guided Diversification of Green Technology Supply Chains uses trade-network analysis and optimization to diversify suppliers against disruption risks in green technologies.
Abstract
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