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Resilience of Japanese Multinational Enterprises' Production Networks during the COVID-19 Pandemic

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  • LIANG, Licheng

Abstract

We use COVID-19 as an exogenous shock to analyze the impact of Covid-19 pandemic on Japanese multinational affiliates’ performance, determining that the pandemic adversely impacted performance in general, but severe disruptions did not last longer than one year. The COVID-19 shock also affected global transaction networks, and affiliates’ total sales were severely affected by procurement challenges. Regarding heterogeneous effects, affiliates actively engaged in trade experienced worse conditions than localoriented firms. Finally, we explore whether and which local backward linkages could mitigate such shocks, concluding that affiliates’ local procurement from companies beyond only Japanese firms could gain resilience.

Suggested Citation

  • 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.
    • Handle: RePEc:hit:hituec:742
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/79854/DP742.pdf
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    More about this item

    Keywords

    COVID-19; Multinational enterprises (MNEs); Affiliates; International production network; Resilience;
    All these keywords.

    JEL classification:

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

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