Understanding the dynamics of export in the short run. The role of foreign and global shocks

Paweł Galiński and Jakub Mućk

No 387, NBP Working Papers from Narodowy Bank Polski

Abstract: This paper introduces a novel Bayesian SVAR framework to identify the short-run drivers of export fluctuations across 18 EU economies, focusing on transmission through Global Value Chains (GVCs). By applying shock identification via sign restrictions within a hierarchical block exogeneity structure (domestic, foreign, and global), we offer four key insights. First, we show that while the Great Trade Collapse was primarily driven by global demand and uncertainty, the COVID-19 crisis involved a complex confluence of non-domestic demand and supply shocks. Second, tight integration within European production networks does not shield these economies from global structural shocks, which remain the primary drivers of export variance. Third, we provide evidence that trade openness and participation in investment-specific GVCs heighten the sensitivity of domestic exports to global shocks, particularly through cost-push mechanisms in backward linkages, while shorter GVC forward linkages tend to reduce this exposure.

Keywords: structural VAR; exports; sign restrictions; Global Value Chains (search for similar items in EconPapers)
JEL-codes: C32 F14 F15 F43 F60 (search for similar items in EconPapers)
Pages: 51
Date: 2026
Note: We would like to thank participants at the NBP (Narodowy Bank Polski), BBK (Deutsche Bundesbank), CNB (Czech National Bank) and ECB (European Central Bank) seminars for useful comments and discussions. The views expressed herein belong to the authors and have not been endorsed by Narodowy Bank Polski.
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:387

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