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How resilient was trade to COVID-19?

Maria Bas1, Ana Fernandes2, Caroline Paunov3

  • 1University of Paris 1, CES, France.

Economics Letters
|June 26, 2023
PubMed
Summary

The COVID-19 pandemic impacted global exports, with products relying heavily on single suppliers facing declines. However, automated production and diversified supply chains enhanced export resilience during the crisis.

Area of Science:

  • Economics
  • International Trade
  • Supply Chain Management

Background:

  • The COVID-19 pandemic caused unprecedented disruptions to global trade and supply chains.
  • Understanding the differential impact of the pandemic on exports based on product characteristics is crucial for economic policy.

Purpose of the Study:

  • To analyze the short-run resilience of exports to the COVID-19 pandemic.
  • To identify product characteristics that influenced export performance during the crisis.

Main Methods:

  • Utilized global monthly product-level export data to the United States, Japan, and 27 European Union countries (January 2018 - December 2021).
  • Examined the relationship between product characteristics (input supplier reliance, production automation) and export fluctuations during the pandemic.
Keywords:
COVID-19ExportsHigh-frequency dataResilienceShockVulnerability

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Main Results:

  • Products with high reliance on single input suppliers (e.g., China) experienced significant export declines.
  • Products with automated production processes demonstrated increased export performance.
  • Vulnerabilities in unskilled-intensive exports decreased over time.
  • Diversified foreign input reliance initially hindered but later improved export resilience.

Conclusions:

  • Product characteristics significantly mediated export responses to the COVID-19 shock.
  • Supply chain diversification and production automation are key factors for export resilience in crises.
  • Policy interventions may be needed to support vulnerable export sectors.