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Density as defense: Product space relatedness and export resilience during the COVID-19 pandemic

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  • Tu, Minghui
  • Wang, Yuyan

Abstract

The convergence of profound global changes and an unprecedented public health crisis has intensified the external uncertainties confronting China's foreign trade. This study is based on export data from 2020 to 2022 at the province–product–year–trade partner level to investigate the influence of product relatedness density (PRD) on export resilience during the COVID-19 pandemic, with a focus on intra-regional relatedness structures. The findings reveal that, unlike vertical linkages in input–output frameworks, PRD reflects the structural characteristics of interactions among advantage products within the product space network. Under external shocks, higher PRD enhances short-term export resilience. The underlying mechanism suggests that PRD can indirectly influence export resilience through network spillover, the upgrading of export product quality, and the accumulation of competitive advantages. The extended heterogeneity analysis suggests that the positive effect of PRD is more pronounced during the recovery periods, for countries with closer trade ties, in non-eastern regions, and within industries with lower levels of global value chain integration. Based on these results, our study suggests that, domestically, priority should be given to enhancing regional product relatedness density, with local governments focusing on the development of competitive products and strengthening industrial chains to promote a balanced specialization-diversification structure. Externally, fostering higher-level trade partnerships is crucial for reinforcing the dual circulation development strategy.

Suggested Citation

  • Tu, Minghui & Wang, Yuyan, 2025. "Density as defense: Product space relatedness and export resilience during the COVID-19 pandemic," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004496
    DOI: 10.1016/j.iref.2025.104286
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    1. Du, Weijian & Cheng, Cheng & Li, Mengjie, 2025. "Can listed company digitization reduce the risk of export failure? Evidence from multisource heterogeneous data in China," International Review of Economics & Finance, Elsevier, vol. 103(C).

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