The impact of COVID‐19 on global value chains: Disruption in nonessential goods production
| Autor: | Christa D. Court, Luis A. da Silva Cruz, João Pedro Ferreira, Pedro Ramos, Eduardo Barata |
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| Rok vydání: | 2021 |
| Předmět: |
media_common.quotation_subject
Geography Planning and Development WIOD 010501 environmental sciences Management Monitoring Policy and Law Development 01 natural sciences Gross domestic product Goods and services COVID‐19 0502 economics and business Production (economics) Economic impact analysis 050207 economics 0105 earth and related environmental sciences media_common international trade 05 social sciences input–output Original Articles global value chain International economics Interdependence Shock (economics) Value (economics) Original Article Business Global value chain |
| Zdroj: | Regional Science Policy & Practice |
| ISSN: | 1757-7802 |
| DOI: | 10.1111/rsp3.12416 |
| Popis: | Public health measures enacted to mitigate the spread of coronavirus disease 2019 (COVID-19) have dampened economic activity by shuttering businesses that provide ‘nonessential’ goods and services. Not surprisingly, these actions directly impacted demand for nonessential goods and services, but the full impact of this shock on the broader economy will depend on the nature and strength of value chains. In a world where production chains are increasingly fragmented, a shock in one industry (or a group of industries) in one country will affect other domestic industries as well as international trade, leading to impacts on production in other countries. We employ the World Input–Output Database to depict the interdependencies among both industries and countries, which provides a full representation of global value chains. By assuming a homogeneous impact on demand for nonessential goods and services around the world, we demonstrate asymmetric effects on production by industry and international trade, leading to asymmetric relative impacts on national economies. Our results indicate that if demand for nonessential goods and services decreases by 50%, the global gross domestic product will decline by 23%, leading to relative impacts that are larger in China, Indonesia, and some European countries. Also, international trade declines by almost 30%, largely due to a reduction in economic activity associated with the production of raw materials and certain types of manufacturing. This work highlights the relevancy of going beyond measuring the direct effects of COVID-19 and provides insights into how international trade linkages will induce broader economic impacts across the globe. © 2021 The Authors. Regional Science Policy & Practice © 2021 Regional Science Association International |
| Databáze: | OpenAIRE |
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