Estimating the Impact of COVID-19 on International Trade: Cases of Major Countries Using the SUR Model

Taeil Kim, Sunghwa Park (), Hanna Kim and Janghan Kwon
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Taeil Kim: Maritime Policy Research Department, Korea Maritime Institute, Busan 49111, Republic of Korea
Sunghwa Park: College of Business Administration, Gyeongsang National University, Jinju 52828, Republic of Korea
Hanna Kim: Maritime Policy Research Department, Korea Maritime Institute, Busan 49111, Republic of Korea
Janghan Kwon: Ocean Economy Strategy Department, Korea Maritime Institute, Busan 49111, Republic of Korea

Sustainability, 2023, vol. 15, issue 24, 1-17

Abstract: This study examined the intricate effects of the COVID-19 pandemic on international trade complexity. Focusing on major international trading entities such as Hong Kong, Korea, China, Japan, and the U.S., we evaluated how confirmed COVID-19 cases and government responses influenced trade patterns, particularly in exports and imports. We employed a seemingly unrelated regression (SUR) analysis with cyclic regression coefficients to scrutinize changes in trade relationships between 2020 and 2021. Korea serves as the central country for this analysis, and the findings extend to other nations. The results revealed the varied impact of COVID-19 on trade across countries. Exports from Korea to China were correlated with COVID-19 case numbers and government actions in both countries. Additionally, imports from China, Japan, the U.S. and Vietnam—excluding Hong Kong—were significantly influenced by confirmed COVID-19 cases in Korea, reflecting the demand dynamics. Government interventions also played a substantial role in shaping trade patterns. Previous studies have primarily focused on financial markets and supply chains, whereas our study analyzed the changes in trade with Korea’s five largest trading partners: China, the U.S., Japan, Vietnam, and Hong Kong. Notably, we utilized long-term data and changes in major trading partners in Asia over time.

Keywords: COVID-19; international trade; Asian countries; seemingly unrelated regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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