Resilience of Japanese Multinational Enterprises' Production Networks during the COVID-19 Pandemic

Licheng Liang

No 742, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: We use COVID-19 as an exogenous shock to analyze the impact of Covid-19 pandemic on Japanese multinational affiliates’ performance, determining that the pandemic adversely impacted performance in general, but severe disruptions did not last longer than one year. The COVID-19 shock also affected global transaction networks, and affiliates’ total sales were severely affected by procurement challenges. Regarding heterogeneous effects, affiliates actively engaged in trade experienced worse conditions than localoriented firms. Finally, we explore whether and which local backward linkages could mitigate such shocks, concluding that affiliates’ local procurement from companies beyond only Japanese firms could gain resilience.

Keywords: COVID-19; Multinational enterprises (MNEs); Affiliates; International production network; Resilience (search for similar items in EconPapers)
JEL-codes: F14 F23 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-06
New Economics Papers: this item is included in nep-int and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hituec:742

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