IDEAS home Printed from https://ideas.repec.org/p/bdi/opques/qef_816_23.html
   My bibliography  Save this paper

Are the Happy Few still happy? Exporter heterogeneity during the COVID-19 pandemic in Italy

Author

Listed:
  • Gloria Allione

    (Bank of Italy)

  • Claire Giordano

    (Bank of Italy)

Abstract

By using highly granular monthly customs data and firm balance sheets, we document how firm heterogeneity mattered significantly in explaining Italy's 2020-21 goods export dynamics. Via a trade margin decomposition, we show how the exporters in the top 1 per cent of the export distribution (the ‘Happy Few’) were responsible for both the 2020 pandemic collapse and the slowdown in the second half of 2021 triggered by global input shortages. These firms operated mainly at the intensive margin and only partly by exiting some countries during the first wave of the pandemic. The relatively weaker performance of the Happy Few is confirmed when controlling for product and geographical specialization via econometric shift-share regressions. One possible explanation is the high share of top exporters participating in global value chains (GVCs). Exporters strongly integrated in GVCs were indeed hurt more by the two shocks than non-GVC firms were. Moreover, the exports of GVC firms that resorted more intensely to just-in-time business models with low inventory levels were more adversely affected by the 2021 supply chain disruptions.

Suggested Citation

  • Gloria Allione & Claire Giordano, 2023. "Are the Happy Few still happy? Exporter heterogeneity during the COVID-19 pandemic in Italy," Questioni di Economia e Finanza (Occasional Papers) 816, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_816_23
    as

    Download full text from publisher

    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2023-0816/QEF_816_23.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kristian Behrens & Gregory Corcos & Giordano Mion, 2013. "Trade Crisis? What Trade Crisis?," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 702-709, May.
    2. Martin, Julien & Mejean, Isabelle & Parenti, Mathieu, 2020. "Relationship stickiness, international trade, and economic uncertainty," CEPR Discussion Papers 15609, C.E.P.R. Discussion Papers.
    3. Angela Cheptea & Lionel Fontagné & Soledad Zignago, 2014. "European export performance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 25-58, February.
    4. Jean-Charles Bricongne & Juan Carluccio & Lionel Gérard Fontagné & Guillaume Gaulier & Sebastian Stumpner, 2022. "From Macro to Micro: Large Exporters Coping with Common Shocks," CESifo Working Paper Series 9857, CESifo.
    5. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
    6. Raphael Lafrogne-Joussier & Julien Martin & Isabelle Mejean, 2023. "Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 170-215, March.
    7. Rebecca Freeman & Richard Baldwin, 2022. "Risks and Global Supply Chains: What We Know and What We Need to Know," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 153-180, August.
    8. Silvia Fabiani & Alberto Felettigh & Claire Giordano & Roberto Torrini, 2019. "Making room for new competitors. A comparative perspective on Italy’s exports in the euro-area market," Questioni di Economia e Finanza (Occasional Papers) 530, Bank of Italy, Economic Research and International Relations Area.
    9. Gita Gopinath & Brent Neiman, 2014. "Trade Adjustment and Productivity in Large Crises," American Economic Review, American Economic Association, vol. 104(3), pages 793-831, March.
    10. Demeter, Krisztina & Matyusz, Zsolt, 2011. "The impact of lean practices on inventory turnover," International Journal of Production Economics, Elsevier, vol. 133(1), pages 154-163, September.
    11. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    12. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    13. Claire Giordano & Paloma Lopez-Garcia, 2021. "Firm heterogeneity and international trade: A cross-country analysis within the EU," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(1), pages 68-103, January.
    14. Stefano Federico & Claire Giordano, 2021. "Beneath the surface: investigating industry heterogeneity in Italy’s goods export market share performance," Questioni di Economia e Finanza (Occasional Papers) 641, Bank of Italy, Economic Research and International Relations Area.
    15. Xavier Gabaix, 2011. "The Granular Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 79(3), pages 733-772, May.
    16. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437, December.
    17. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    18. Oya Celasun & Mr. Niels-Jakob H Hansen & Ms. Aiko Mineshima & Mariano Spector & Jing Zhou, 2022. "Supply Bottlenecks: Where, Why, How Much, and What Next?," IMF Working Papers 2022/031, International Monetary Fund.
    19. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
    20. Angela Cheptea & Guillaume Gaulier & Soledad Zignago, 2004. "The World Market: Market Shares and Export Performances," La Lettre du CEPII, CEPII research center, issue 231.
    21. Simona Giglioli & Claire Giordano, 2023. "Exploring the recent resilience of Italy's goods exports: Competitiveness, energy intensity and supply bottlenecks," Questioni di Economia e Finanza (Occasional Papers) 785, Bank of Italy, Economic Research and International Relations Area.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Lucio, Juan & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2022. "Impact of Covid-19 containment measures on trade," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 766-778.
    2. Giordano, Claire & Lopez-Garcia, Paloma, 2019. "Firm heterogeneity and trade in EU countries: a cross-country analysis," Occasional Paper Series 225, European Central Bank.
    3. William F. Lincoln & Andrew H. McCallum & Michael Siemer, 2017. "The Great Recession and a Missing Generation of Exporters," Finance and Economics Discussion Series 2017-108, Board of Governors of the Federal Reserve System (U.S.).
    4. Bas,Maria & Fernandes,Ana Margarida & Paunov,Caroline, 2022. "How Resilient Was Trade to COVID-19 ?," Policy Research Working Paper Series 9975, The World Bank.
    5. Arne J. Nagengast & Robert Stehrer, 2016. "The Great Collapse in Value Added Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 392-421, May.
    6. Crinò, Rosario & Ogliari, Laura, 2015. "Financial Frictions, Product Quality, and International Trade," CEPR Discussion Papers 10555, C.E.P.R. Discussion Papers.
    7. Glenn Magerman & Karolien De Bruyne & Emmanuel Dhyne & Jan Van Hove, 2016. "Heterogeneous Firms and the Micro Origins of Aggregate Fluctuations," Working Papers ECARES ECARES 2016-35, ULB -- Universite Libre de Bruxelles.
    8. Peter S. Eppinger & Nicole Meythaler & Marc-Manuel Sindlinger & Marcel Smolka, 2018. "The great trade collapse and the Spanish export miracle: Firm-level evidence from the crisis," The World Economy, Wiley Blackwell, vol. 41(2), pages 457-493, February.
    9. Kaleb Girma Abreha & Valérie Smeets & Frédéric Warzynski, 2020. "Coping with the crisis and export diversification," The World Economy, Wiley Blackwell, vol. 43(5), pages 1452-1481, May.
    10. Pol Antràs, 2020. "De-Globalisation? Global Value Chains in the Post-COVID-19 Age," NBER Working Papers 28115, National Bureau of Economic Research, Inc.
    11. Guillaume Gaulier & Vincent Vicard & Lionel Fontagné & Jean-Charles Bricongne & Dimitri Bellas, 2010. "Une analyse de la dynamique des exportations des sociétés françaises de 2000 à 2009," Économie et Statistique, Programme National Persée, vol. 438(1), pages 239-265.
    12. Xuepeng Liu & Emanuel Ornelas & Huimin Shi, 2022. "The trade impact of the COVID‐19 pandemic," The World Economy, Wiley Blackwell, vol. 45(12), pages 3751-3779, December.
    13. Lebastard, Laura & Matani, Marco & Serafini, Roberta, 2023. "GVC exporter performance during the COVID-19 pandemic: the role of supply bottlenecks," Working Paper Series 2766, European Central Bank.
    14. William Lincoln & Andrew McCallum & Michael Siemer, 2018. "The Great Recession and a Missing Generation of Exporters," 2018 Meeting Papers 558, Society for Economic Dynamics.
    15. de Lucio, Juan & Díaz-Mora, Carmen & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2023. "Do firms react to supply chain disruptions?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 902-916.
    16. Cajal-Grossi, Julia & Del Prete, Davide & Macchiavello, Rocco, 2023. "Supply chain disruptions and sourcing strategies," International Journal of Industrial Organization, Elsevier, vol. 90(C).
    17. Simola, Heli, 2021. "Trade collapse during the covid-19 crisis and the role of demand composition," BOFIT Discussion Papers 12/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    18. Clément Nedoncelle, 2021. "Temperatures, Firm Size and Exports in Developing Countries [Températures, Taille des Firmes, et Exportations dans les Pays en Développement]," Post-Print hal-03803308, HAL.
    19. Dhyne, Emmanuel & Berthou, Antoine & Soares, Ana Cristina & Bugamelli, Matteo & Cazacu, Ana-Maria & Lalinsky, Tibor & Meriküll, Jaanika & Harasztosi, Péter & Demian, Calin-Vlad & Oropallo, Filippo, 2015. "Assessing European firms' exports and productivity distributions: the CompNet trade module," Working Paper Series 1788, European Central Bank.
    20. Simola, Heli, 2021. "The impact of Covid-19 on global value chains," BOFIT Policy Briefs 2/2021, Bank of Finland Institute for Emerging Economies (BOFIT).

    More about this item

    Keywords

    firm heterogeneity; global value chains; inventory management; trade margins; shift-share decomposition;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:opques:qef_816_23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.