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The Impact of COVID-19 on Global Production: Evidence from Japanese Multinational Firms

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  • Hongyong ZHANG

Abstract

Using quarterly aggregate-level data on Japanese manufacturing affiliates in major host countries, this paper examines the impact of COVID-19 on global production by multinational corporations. Our findings can be summarized as follows: First, we found significantly negative impacts of COVID-19 on the performance of Japanese affiliates, especially sales in Q2 2020. Second, local sales, exports to Japan, and exports to third countries almost recovered in Q4 2020, implying the resilience of multinational production and global supply chains. Third, lockdown policies, in particular workplace closure orders for all-but-essential workplaces had significant negative effects on the sales and employment of Japanese affiliates.

Suggested Citation

  • Hongyong ZHANG, 2021. "The Impact of COVID-19 on Global Production: Evidence from Japanese Multinational Firms," Discussion papers 21014, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:21014
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    References listed on IDEAS

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    1. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    2. Fukunari Kimura, 2020. "Exit Strategies for ASEAN Member States: Keeping Production Networks Alive Despite the Impending Demand Shock," Working Papers PB-2020-03, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Fukunari Kimura & Shandre Mugan Thangavelu & Dionisius Narjoko & Christopher Findlay, 2020. "Pandemic (COVID‐19) Policy, Regional Cooperation and the Emerging Global Production Network†," Asian Economic Journal, East Asian Economic Association, vol. 34(1), pages 3-27, March.
    4. Cheng Chen & Tatsuro Senga & Hongyong Zhang, 2021. "Measuring business-level expectations and uncertainty: survey evidence and the COVID-19 pandemic," The Japanese Economic Review, Springer, vol. 72(3), pages 509-532, July.
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    Cited by:

    1. Hongyong ZHANG & Thi Thanh Ha DOAN, 2023. "Global Sourcing and Firm Inventory during the Pandemic," Discussion papers 23018, Research Institute of Economy, Trade and Industry (RIETI).
    2. Cheng Chen & Tatsuro Senga & Hongyong Zhang, 2021. "Measuring business-level expectations and uncertainty: survey evidence and the COVID-19 pandemic," The Japanese Economic Review, Springer, vol. 72(3), pages 509-532, July.
    3. Rajali Maharjan & Hironori Kato, 2023. "Logistics and Supply Chain Resilience of Japanese Companies: Perspectives from Impacts of the COVID-19 Pandemic," Logistics, MDPI, vol. 7(2), pages 1-12, May.
    4. Satoshi Tanaka, 2022. "Economic Impacts of SARS/MERS/COVID‐19 in Asian Countries," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 41-61, January.
    5. Mitsuyo ANDO & Kazunobu HAYAKAWA & Shujiro URATA & Kenta YAMANOUCHI, 2025. "Intra-firm Networks during the COVID-19 Pandemic," Discussion papers 25040, Research Institute of Economy, Trade and Industry (RIETI).
    6. Kiyota, Kozo, 2022. "The COVID-19 pandemic and the world trade network," Journal of Asian Economics, Elsevier, vol. 78(C).
    7. Eichengreen, Barry, 2022. "COVID and the outlook for emerging markets," Journal of Policy Modeling, Elsevier, vol. 44(4), pages 820-826.
    8. LIANG, Licheng, 2023. "Resilience of Japanese Multinational Enterprises' Production Networks during the COVID-19 Pandemic," Discussion Paper Series 742, Institute of Economic Research, Hitotsubashi University.
    9. Sass, Magdolna & Gál, Zoltán & S. Gubik, Andrea & Szunomár, Ágnes & Túry, Gábor, 2022. "A koronavírus-járvány kezelése a külföldi tulajdonú magyarországi vállalatoknál [The effects and handling of the Covid-19 pandemic by foreign-owned firms in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 758-780.
    10. Clement A. Tisdell, 2021. "Determinants of the Economic Vulnerability of Businesses to Pandemics and Similar Events," JRFM, MDPI, vol. 14(11), pages 1-13, November.

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