Work

Tracing cascading economic impacts of volcanic disruption through regional value chains: Implications for disaster risk reduction

Year: 2026

Type: article

Abstract: Volcanic eruptions pose significant risks to regional economies by disrupting local industries and their interdependent supply chains. This study examines the cascading economic consequences of a volcanic disruption scenario in the Kawerau District of New Zealand’s Bay of Plenty, a nationally significant hub for paper manufacturing. A stepwise Multi-Regional Input–Output (MRIO) approach is applied to trace upstream input dependencies and downstream market linkages, revealing the region’s strong reliance on forestry inputs and international export markets. A simulated 50% reduction in forestry supply generates substantial output losses, with impacts propagating through national and global value chains. Scenario analysis shows that targeted resilience measures, such as inventory stockpiling, can substantially mitigate these cascading losses by buffering critical production bottlenecks. By linking volcanic hazard context with network-based economic modelling, this study provides an operational framework for assessing systemic risk and identifying leverage points for resilience investment, offering practical insights for strengthening preparedness in hazard-prone regional economies.

Source: International Journal of Disaster Risk Reduction

DOI: 10.1016/j.ijdrr.2026.106143

Authors: Duncan Grimson, Mark Bebbington, Garry McDonald

Institution: Massey University

Language: English

Topic: Supply Chain Resilience and Risk Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,200