IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/16813.html

Supply shocks in supply chains: Evidence from the early lockdown in China

Author

Listed:
  • Martin, Julien
  • Lafrogne-Joussier, Raphael
  • Mejean, Isabelle

Abstract

How do firms in global value chains react to input shortages? We examine micro-level adjustments to supply chain shocks, building on the COVID-19 pandemic as a case study. French firms sourcing inputs from China just before the early lockdown in the country experienced a drop in imports between February and April 2020 that is 7% larger than firms sourcing their inputs from elsewhere. This shock on input purchases transmits to the rest of the supply chain through exposed firms' domestic and export sales. Between February and April, firms exposed to the Chinese early lockdown experienced a 5.7% drop in domestic sales and a 5% drop in exports, in relative terms. The drop in foreign sales is entirely attributable to a lower volume of exports driven by a reduction in the number of markets served. We then evaluate whether mitigation strategies adopted by some exposed firms helped them weather the shock. Whereas the ex-ante geographic diversification of inputs does not seem to mitigate the impact of the shock, firms with relatively high inventories have been able to absorb the supply shock better.

Suggested Citation

  • Martin, Julien & Lafrogne-Joussier, Raphael & Mejean, Isabelle, 2021. "Supply shocks in supply chains: Evidence from the early lockdown in China," CEPR Discussion Papers 16813, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16813
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP16813
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    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:cpr:ceprdp:16813. 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.

    We have no bibliographic references for this item. You can help adding them by using 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://www.cepr.org .

    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.