[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/16201.html
   My bibliography  Save this paper

The Trade Impact of the Covid-19 Pandemic

Author

Listed:
  • Ornelas, Emanuel
  • Liu, Xuepeng
  • Shi, Huimin
Abstract
Using a gravity-like approach, we study how Covid-19 deaths and lockdown policies affected countries’ imports from China during 2020. We find that a country’s own Covid-19 deaths and lockdowns significantly reduced its imports from China, suggesting that the negative demand effects prevailed over the negative supply effects of the pandemic. On the other hand, Covid-19 deaths in the main trading partners of a country (excluding China) induces more imports from China, partially offsetting countries’ own effects. The net effect of moving from the pre-pandemic situation to another where the main variables are evaluated at their 2020 mean is, on average, a reduction of nearly 10% in imports from China. There is also significant heterogeneity. For example, the negative own effects of the pandemic vanish when we restrict the sample to medical goods and are significantly mitigated for products with a high “work-from-home†share or a high contract intensity for products exported under processing trade, and for capital goods. We also find that deaths and lockdowns in previous months tend to increase current imports from China, partially offsetting the contemporaneous trade loss, suggesting that trade is not simply “destroyed,†but partially “postponed.â€

Suggested Citation

  • Ornelas, Emanuel & Liu, Xuepeng & Shi, Huimin, 2021. "The Trade Impact of the Covid-19 Pandemic," CEPR Discussion Papers 16201, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16201
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP16201
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kristian Behrens & Gregory Corcos & Giordano Mion, 2013. "Trade Crisis? What Trade Crisis?," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 702-709, May.
    2. Thomas Hale & Noam Angrist & Rafael Goldszmidt & Beatriz Kira & Anna Petherick & Toby Phillips & Samuel Webster & Emily Cameron-Blake & Laura Hallas & Saptarshi Majumdar & Helen Tatlow, 2021. "A global panel database of pandemic policies (Oxford COVID-19 Government Response Tracker)," Nature Human Behaviour, Nature, vol. 5(4), pages 529-538, April.
    3. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    4. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    5. Dingel, Jonathan I. & Neiman, Brent, 2020. "How many jobs can be done at home?," Journal of Public Economics, Elsevier, vol. 189(C).
    6. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    7. Alessandro Sforza & Marina Steininger, 2020. "Globalization in the Time of Covid-19," CESifo Working Paper Series 8184, CESifo.
    8. Antoine Berthou & Sebastian Stumpner, 2022. "Trade Under Lockdown," Working papers 867, Banque de France.
    9. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
    10. Pol Antràs & Stephen J. Redding & Esteban Rossi-Hansberg, 2023. "Globalization and Pandemics," American Economic Review, American Economic Association, vol. 113(4), pages 939-981, April.
    11. Pol Antràs & Stephen J. Redding & Esteban Rossi-Hansberg, 2020. "Globalisation and pandemics: surprising interactions," CentrePiece - The magazine for economic performance 591, Centre for Economic Performance, LSE.
    12. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
    13. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    14. Rudolfs Bems & Robert C. Johnson & Kei-Mu Yi, 2013. "The Great Trade Collapse," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 375-400, May.
    15. Kazunobu Hayakawa & Hiroshi Mukunoki, 2021. "Impacts of COVID‐19 on Global Value Chains," The Developing Economies, Institute of Developing Economies, vol. 59(2), pages 154-177, June.
    16. Rudolfs Bems & Robert C Johnson & Kei-Mu Yi, 2010. "Demand Spillovers and the Collapse of Trade in the Global Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 58(2), pages 295-326, December.
    17. Peter Eppinger & Gabriel J. Felbermayr & Oliver Krebs & Bohdan Kukharskyy, 2021. "Decoupling Global Value Chains," CESifo Working Paper Series 9079, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bas, Maria & Fernandes, Ana & Paunov, Caroline, 2024. "How resilient was trade to COVID-19?," Economics Letters, Elsevier, vol. 240(C).
    2. Serdar Kabaca & Kerem Tuzcuoglu, 2023. "Supply Drivers of US Inflation Since the COVID-19 Pandemic," Staff Working Papers 23-19, Bank of Canada.
    3. Konstantins Benkovskis & Jaanika Merikull & Aurelija Proskute, 2024. "The transmission of trade shocks across countries: firm-level evidence from the Covid-19 crisis," Working Papers 2024/01, Latvijas Banka.
    4. de Lucio, Juan & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2022. "Impact of Covid-19 containment measures on trade," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 766-778.
    5. João Amador & Carlos Melo Gouveia & Ana Catarina Pimenta, 2023. "COVID-19, lockdowns and international trade: evidence from firm-level data," Empirical Economics, Springer, vol. 65(5), pages 2427-2466, November.
    6. Raphael Lafrogne-Joussier & Julien Martin & Isabelle Mejean, 2023. "Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 170-215, March.
    7. Simola, Heli, 2021. "Trade collapse during the covid-19 crisis and the role of demand composition," BOFIT Discussion Papers 12/2021, Bank of Finland, Institute for Economies in Transition.
    8. Shigeru Kimura & Ikarii Ryohei & Endo Seiya, 2021. "Impacts of COVID-19 on the Energy Demand Situation of East Asia Summit Countries," Working Papers DP-2021-22, Economic Research Institute for ASEAN and East Asia (ERIA).
    9. Alejandro G. Graziano & Yuan Tian, 2023. "Trade disruptions along the global supply chain," Discussion Papers 2023-06, University of Nottingham, GEP.
    10. Gian Paolo Clemente & Rosanna Grassi & Giorgio Rizzini, 2022. "The effect of the pandemic on complex socio-economic systems: community detection induced by communicability," Papers 2201.12618, arXiv.org.
    11. Orhan Cengiz & Müge Manga, 2022. "Impact of COVID-19 pandemic on exports: new evidence from selected European Union countries and Turkey," Asia-Pacific Journal of Regional Science, Springer, vol. 6(3), pages 1195-1219, October.
    12. repec:zbw:bofitp:2021_012 is not listed on IDEAS
    13. Jaqueline Hansen & Antonia Kamaliev & Hans-Jörg Schmerer, 2023. "The COVID-19 Pandemic and Chinese Trade Relations," Open Economies Review, Springer, vol. 34(3), pages 673-702, July.
    14. Bart Kamp, 2021. "Responding to the COVID-19 pandemic: lessons in supply chain management among industrial firms," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 100(02), pages 210-233.
    15. Sinem Koçak & Özge Barış-Tüzemen, 2022. "Impact of the COVID-19 on foreign direct investment inflows in emerging economies: evidence from panel quantile regression," Future Business Journal, Springer, vol. 8(1), pages 1-12, December.
    16. Simola, Heli, 2021. "Trade collapse during the covid-19 crisis and the role of demand composition," BOFIT Discussion Papers 12/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    17. Alejandro G. Graziano & Yuan Tian, 2023. "Trade Disruptions Along the Global Supply Chain," Working Papers 243, Red Nacional de Investigadores en Economía (RedNIE).
    18. Antoine Berthou & Sebastian Stumpner, 2022. "Trade Under Lockdown," Working papers 867, Banque de France.
    19. Chen, Hongyi & Tillmann, Peter, 2023. "Lockdown spillovers," Journal of International Money and Finance, Elsevier, vol. 137(C).
    20. Christopher Findlay & Hein Roelfsema & Niall Van De Wouw, 2021. "Feeling the Pulse of Global Value Chains: Air Cargo and COVID-19," Working Papers DP-2021-23, Economic Research Institute for ASEAN and East Asia (ERIA).
    21. Sarah Y Tong & Yao Li & Tuan Yuen Kong, 2021. "Exploring Digital Economic Agreements to Promote Digital Connectivity in ASEAN," Working Papers DP-2021-24, Economic Research Institute for ASEAN and East Asia (ERIA).
    22. Dagher, Leila & abboud, ali & sidani, ola & Abi Younes, Oussama, 2022. "For Inclusive and Fair Covid-19 Socio-Economic Recovery Measures in Lebanon: Synthesis Report," MPRA Paper 116132, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Lucio, Juan & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2022. "Impact of Covid-19 containment measures on trade," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 766-778.
    2. Schmidt-Eisenlohr, Tim, 2013. "Towards a theory of trade finance," Journal of International Economics, Elsevier, vol. 91(1), pages 96-112.
    3. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    4. Bas, Maria & Fernandes, Ana & Paunov, Caroline, 2024. "How resilient was trade to COVID-19?," Economics Letters, Elsevier, vol. 240(C).
    5. Arne J. Nagengast & Robert Stehrer, 2016. "The Great Collapse in Value Added Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 392-421, May.
    6. Dennis Novy & Alan M. Taylor, 2020. "Trade and Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 749-765, October.
    7. Pol Antràs, 2020. "De-Globalisation? Global Value Chains in the Post-COVID-19 Age," NBER Working Papers 28115, National Bureau of Economic Research, Inc.
    8. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    9. Jiansuo Pei & Gaaitzen de Vries & Meng Zhang, 2022. "International trade and Covid‐19: City‐level evidence from China's lockdown policy," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 670-695, June.
    10. Simola, Heli, 2021. "Trade collapse during the covid-19 crisis and the role of demand composition," BOFIT Discussion Papers 12/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    11. Mattia Di Ubaldo, 2015. "Product Cost-Share: a Catalyst of the Trade Collapse," Working Paper Series 8015, Department of Economics, University of Sussex Business School.
    12. Chen, Natalie & Juvenal, Luciana, 2018. "Quality and the Great Trade Collapse," Journal of Development Economics, Elsevier, vol. 135(C), pages 59-76.
    13. William F. Lincoln & Andrew H. McCallum & Michael Siemer, 2017. "The Great Recession and a Missing Generation of Exporters," Finance and Economics Discussion Series 2017-108, Board of Governors of the Federal Reserve System (U.S.).
    14. Ariu, Andrea, 2016. "Crisis-proof services: Why trade in services did not suffer during the 2008–2009 collapse," Journal of International Economics, Elsevier, vol. 98(C), pages 138-149.
    15. repec:spo:wpmain:info:hdl:2441/lj8ndsutc8i5ast4viool3gqa is not listed on IDEAS
    16. Åsa Johansson & Eduardo Olaberría, 2014. "Global Trade and Specialisation Patterns Over the Next 50 Years," OECD Economic Policy Papers 10, OECD Publishing.
    17. William Lincoln & Andrew McCallum & Michael Siemer, 2018. "The Great Recession and a Missing Generation of Exporters," 2018 Meeting Papers 558, Society for Economic Dynamics.
    18. Pavel Chakraborty, 2024. "Bank ownership and firm performance," Economica, London School of Economics and Political Science, vol. 91(361), pages 238-267, January.
    19. Simola, Heli, 2021. "Trade collapse during the covid-19 crisis and the role of demand composition," BOFIT Discussion Papers 12/2021, Bank of Finland, Institute for Economies in Transition.
    20. Kevin Hjortshøj O’Rourke, 2018. "Two Great Trade Collapses: The Interwar Period and Great Recession Compared," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 418-439, September.
    21. Nicolas Berman & Philippe Martin, 2012. "The Vulnerability of Sub-Saharan Africa to Financial Crises: The Case of Trade," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 60(3), pages 329-364, September.

    More about this item

    Keywords

    Trade flows; Covid-19; Lockdown; Stringency; China;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:16201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.