Pandemic trade: COVID‐19, remote work and global value chains

This paper studies the trade effects of COVID‐19 using monthly disaggregated trade data for 28 countries and multiple trading partners from the beginning of the pandemic to June 2020. Regression results based on a sector‐level gravity model show that the negative trade effects induced by COVID‐19 sh...

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Bibliographic Details
Published in:The World Economy 2022-02, Vol.45 (2), p.561-589
Main Authors: Espitia, Alvaro, Mattoo, Aaditya, Rocha, Nadia, Ruta, Michele, Winkler, Deborah
Format: Article
Language:English
Subjects:
COVID-19
Economic analysis
Global economy
global value chains
Gravity
International trade
Invited Review
Pandemics
trade
Trading
Value chain
Vulnerability
Work at home
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Summary:This paper studies the trade effects of COVID‐19 using monthly disaggregated trade data for 28 countries and multiple trading partners from the beginning of the pandemic to June 2020. Regression results based on a sector‐level gravity model show that the negative trade effects induced by COVID‐19 shocks varied widely across sectors. Sectors more amenable to remote work contracted less throughout the pandemic. Importantly, participation in global value chains increased traders’ vulnerability to shocks suffered by trading partners, but it also reduced their vulnerability to domestic shocks.
ISSN:0378-5920
1467-9701
DOI:10.1111/twec.13117