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The impact of COVID-19 on international trade: Evidence from the first shock

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  • Hayakawa, Kazunobu
  • Mukunoki, Hiroshi

Abstract

This study investigates how the effects of COVID-19 on international trade changed over time. To do that, we explore monthly data on worldwide trade from January to August in 2019 and 2020. Specifically, our study data include the exports of 34 countries to 173 countries. We estimated the gravity equation by employing various variables as a proxy for the COVID-19 damage. Our findings can be summarized as follows: First, regardless of our measures to quantify the COVID-19 pandemic, we found significantly negative effects of COVID-19 on the international trade of both exporting and importing countries. Second, those effects, especially the effects of COVID-19 in importing countries, tended to become insignificant since July 2020. This result implies that the harmful impacts of COVID-19 on international trade were accommodated after the first wave of the pandemic to some extent. Third, we found heterogeneous effects across industries. The negative effects on non-essential, durable products persist for a long time, whereas positive effects in industries providing medical products were observed.

Suggested Citation

  • Hayakawa, Kazunobu & Mukunoki, Hiroshi, 2021. "The impact of COVID-19 on international trade: Evidence from the first shock," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:jjieco:v:60:y:2021:i:c:s0889158321000149
    DOI: 10.1016/j.jjie.2021.101135
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    More about this item

    Keywords

    COVID-19; International trade; Gravity equation; Import; Export;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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