Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China

Raphael Lafrogne-Joussier, Julien Martin and Isabelle Mejean
Additional contact information
Raphael Lafrogne-Joussier: CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique

SciencePo Working papers Main from HAL

Abstract: How do firms in global value chains react to input shortages? We examine micro-level adjustments to supply chain shocks, building on the Covid-19 pandemic as a case study. French firms sourcing inputs from China just before the early lockdown in the country experienced a relative drop in imports that increases from February to April 2020. This shock on input purchases transmits to the rest of the supply chain through exposed firm's domestic and export sales. Between February and June, firms exposed to the Chinese early lockdown experienced a 5.5% drop in domestic sales and a 5% drop in exports, in relative terms with respect to comparable non-exposed firms. The drop in foreign sales is entirely attributable to a lower volume of exports driven by a temporary withdrawal from occasional markets. We then dig into the heterogeneity of the transmission across treated firms. Whereas the ex-ante geographic diversification of inputs does not seem to mitigate the impact of the shock, firms with relatively high inventories have been able to absorb the supply shock better.

Keywords: Covid-19 pandemic; Supply chain disruptions; Transmission of shocks; Global value chains (search for similar items in EconPapers)
Date: 2022-03-22
New Economics Papers: this item is included in nep-cna and nep-int
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03880125v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published in IMF Economic Review, inPress, ⟨10.1057/s41308-022-00166-8⟩

Downloads: (external link)
https://sciencespo.hal.science/hal-03880125v1/document (application/pdf)

Related works:
Journal Article: Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China (2023)
Working Paper: Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China (2023)
Working Paper: Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China (2022)
Working Paper: Supply shocks in supply chains: Evidence from the early lockdown in China (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03880125

DOI: 10.1057/s41308-022-00166-8

Access Statistics for this paper

More papers in SciencePo Working papers Main from HAL
Bibliographic data for series maintained by Contact - Sciences Po Departement of Economics ().