ABSTRACT

In this study, a literature review has been conducted to understand the association between natural disasters and trade. The hypothesis of the study is that although natural disasters have a significant impact on trade, they have not been extensively examined in academic literature. The purpose of the study is to determine the accuracy of the claim presented in the hypothesis. Various publications published in the last 12 years, containing pre-defined related keywords, have been analyzed. Studies have been grouped according to the years of publication, sources of disaster data used, level of analysis, methods/ models employed, and the results they reached. As a result of this review, the aim is to find the gap in the literature regarding the association between natural disasters and trade, and consequently recommend a road map for future studies. The findings of this review indicate that most studies concluded that natural disasters negatively affect international trade. However, divergent results emerged in studies using different econometric models or focusing on specific contexts. The review highlights the need for diversifying studies in the literature at a micro-level and with different models. To achieve more specific and clear results, future research should examine the factors determining the impact of natural disasters on international trade data separately and increase the diversity in the econometric approaches used. Increasing research on regional and national levels is important for policymakers in high-risk areas. Raising the number of studies is extremely crucial for reducing the impact of natural disasters and developing effective strategies.