  When do multinationals show resilience during natural disasters? To answer
this, we develop a simple model in which foreign multinationals and local firms
in the host country are interacted through input-output linkages. When natural
disasters seriously hit local firms and thus increase the cost of sourcing
local intermediate inputs, most multinationals may leave the host country.
However, they are likely to stay if they are tightly linked with local
suppliers and face low trade costs of importing foreign intermediates. We
further provide a number of extensions of the basic model to incorporate, for
example, multinationals with heterogeneous productivity and disaster
reconstruction.
