 The trade impact of the COVID‐19 pandemicXuepeng Liu, Emanuel Ornelas and Huimin Shi The World Economy, 2022, vol. 45, issue 12, 3751-3779 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 contrary, COVID‐19 deaths in the main trading partners of a country (excluding China) induce 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’. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:45:y:2022:i:12:p:3751-3779 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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