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Regional economic impact of Covid-19: the role of sectoral structure and trade linkages

Author

Listed:
  • Meinen, Philipp
  • Serafini, Roberta
  • Papagalli, Ottavia

Abstract

The paper provides an ex-post analysis of the determinants of within-country regional heterogeneity of the labour market impact of COVID-19. By focussing on the first wave of the pandemic in the four largest euro area economies, it finds that the propagation of the economic impact across regions cannot be explained by the spread of infections only. Instead, a region’s economic structure is a significant driver of the observed heterogeneity. Moreover, our results suggest that a region's trade relations, both within and across countries, represent a relevant indirect channel through which COVID-19 related disruptions affect regional economic activity. In this regard, the analysis depicts vulnerabilities arising from potential disruptions of the highly integrated EU supply chains. JEL Classification: R11, F14, J40, R15

Suggested Citation

  • Meinen, Philipp & Serafini, Roberta & Papagalli, Ottavia, 2021. "Regional economic impact of Covid-19: the role of sectoral structure and trade linkages," Working Paper Series 2528, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20212528
    Note: 375045
    as

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    References listed on IDEAS

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    Cited by:

    1. Bischoff, Ivo & Diemert, Dörte & Döring, Thomas & Eckardt, Martina & Eltges, Markus & Färber, Gisela & Göppert, Verena & Wohltmann, Matthias & Zademach, Hans-Martin, 2021. "Kommunalfinanzen in und nach der Covid-19-Pandemie," Positionspapier aus der ARL 126, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    2. Coad, Alexander & Amaral-Garcia, Sofia & Bauer, Peter & Domnick, Clemens & Harasztosi, Péter & Pál, Rozália & Teruel, Mercedes, 2022. "Investment expectations by vulnerable European firms: A difference-in-difference approach," EIB Working Papers 2022/04, European Investment Bank (EIB).
    3. Antoine Berthou & Sebastian Stumpner, 2022. "Trade Under Lockdown," Working papers 867, Banque de France.
    4. Mauro Caselli & Andrea Fracasso & Sergio Scicchitano, 2022. "From the lockdown to the new normal: individual mobility and local labor market characteristics following the COVID-19 pandemic in Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1517-1550, October.
    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.
    6. Adam Rose & Terrie Walmsley & Dan Wei, 2021. "Spatial transmission of the economic impacts of COVID-19 through international trade," Letters in Spatial and Resource Sciences, Springer, vol. 14(2), pages 169-196, August.

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    More about this item

    Keywords

    COVID-19 pandemic; input-output linkages; regional differences; sectoral exposure; short-time work;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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