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Shocked by COVID: Exporting Along Global Value Chains

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  • Holger Breinlich
  • Jun Du
  • Oleksandr Shepotylo

Abstract

This paper examines the impact of protectionist policies on exports within global value chains (GVCs), using the COVID-19 pandemic as a natural experiment. Leveraging UK customs data (2017–2020) and a shift-share identification strategy, we estimate an elasticity of exports with respect to intermediate imports of 0.4. A one standard-deviation increase in COVID restrictions in sourcing countries led to a 3.7% decline in intermediate exports. These findings reveal a paradox: policies aimed at self-sufficiency can harm export performance by disrupting supply chains. The study highlights the vulnerabilities of GVCs and the unintended consequences of protectionist trade policies, offering insights into the trade-offs between resilience and open trade networks.

Suggested Citation

  • Holger Breinlich & Jun Du & Oleksandr Shepotylo, 2025. "Shocked by COVID: Exporting Along Global Value Chains," CESifo Working Paper Series 11891, CESifo.
    • Handle: RePEc:ces:ceswps:_11891
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    1. Vasco M Carvalho & Makoto Nirei & Yukiko U Saito & Alireza Tahbaz-Salehi, 2021. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 1255-1321.
    2. 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.
    3. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    4. Christoph E. Boehm & Aaron Flaaen & Nitya Pandalai-Nayar, 2019. "Input Linkages and the Transmission of Shocks: Firm-Level Evidence from the 2011 Tōhoku Earthquake," The Review of Economics and Statistics, MIT Press, vol. 101(1), pages 60-75, March.
    5. 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.
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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