March 2011 disasters caused 1,698 bankruptcies: think tank

Kyodo

A credit research agency said Thursday 1,698 corporate bankruptcies were triggered by the calamity in March 2011 that devastated northeastern Japan.

Tokyo Shoko Research said that the business failures caused by the Great East Japan Earthquake were 5.4 times the 314 bankruptcies caused over three years by the Great Hanshin Earthquake in western Japan in January 1995.

The credit researcher said the 2011 quake, tsunami and nuclear disaster affected 26,985 employees, or 6.1 times more than the 1995 quake.

“There are cases where companies, which have long suspended operations since the disaster, have finally decided to take legal action and file for bankruptcy,” Tokyo Shoko Research said in a statement.

About 90 percent of the bankruptcies can be attributed to indirect factors, such as the loss of clients or suppliers, while 8.3 percent were linked to more direct causes, such as office or factory damage.

Business failures linked to the disasters occurred in nearly all 47 prefectures, with the largest number logged in Tokyo at 519, followed by 134 in Miyagi Prefecture.

Most of the bankruptcies involved restaurants, hotels and other businesses in the services sector, followed by the construction and wholesale sectors.