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Shocked by Covid: exporting along global value chains

Author

Listed:
  • Breinlich, Holger
  • Du, Jun
  • Shepotylo, Oleksandr

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

  • Breinlich, Holger & Du, Jun & Shepotylo, Oleksandr, 2025. "Shocked by Covid: exporting along global value chains," LSE Research Online Documents on Economics 141589, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:141589
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    File URL: https://researchonline.lse.ac.uk/id/eprint/141589/
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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