Does the import diversity of inputs mitigate the negative impact of COVID-19 on global value chains?

This study sheds light on the role of the import diversity of inputs and explores the effects of COVID-19 on global value chains (GVCs). Using monthly export data of final machinery products for 35 countries and indicators of diversity with 252 trade partner countries, we investigate the supply-side...

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Bibliographic Details
Published in:The journal of international trade & economic development 2022-02, Vol.31 (2), p.299-320
Main Authors: Ando, Mitsuyo, Hayakawa, Kazunobu
Format: Article
Language:English
Subjects:
Coronaviruses
COVID-19
Global value chains
gravity
Machinery industry
Side effects
supplier diversification
Value chain
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Summary:This study sheds light on the role of the import diversity of inputs and explores the effects of COVID-19 on global value chains (GVCs). Using monthly export data of final machinery products for 35 countries and indicators of diversity with 252 trade partner countries, we investigate the supply-side effects of COVID-19 on GVCs during the period from January to August 2020 and examine how the import diversity of inputs influences such effects. As a result, we find the negative supply-side effects in all three machinery industries, with the greatest ones in the transport equipment industry. In addition, such negative impacts on machinery industries are larger during the trade-fall period from February to May 2020. Furthermore, we demonstrate that the import diversity of inputs had a significant influence in partially mitigating the harmful supply-side effects of COVID-19, particularly during the early period of February-March 2020.
ISSN:0963-8199
1469-9559
DOI:10.1080/09638199.2021.1968473