Trade and the COVID-19 Pandemic: Lessons from French Firms

By Mariya Brussevich, Chris Papageorgiou, Pauline Wibaux

May 6, 2022

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Format: Chicago

Mariya Brussevich, Chris Papageorgiou, and Pauline Wibaux. Trade and the COVID-19 Pandemic: Lessons from French Firms, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper uses granular customs data from France to investigate propagation of the COVID-19 shock along the supply chains in 2020. It quantifies the effect of the COVID-19 shock on trade adjustment and identifies mitigating and amplifying factors contributing to French firms’ heterogeneous adjustment paths. Early in the pandemic, firms mainly responded to global lockdowns and spread of the virus by reducing trade volumes (intensive margin) as opposed to exiting from import and export markets (ex-tensive margin). However, adjustment along the extensive margin played a more important role in trade with developing countries. It is shown that the impact of lockdowns was stronger for final consumer goods and the trade recovery was predominantly demand-driven. More automated, inventory-intensive, older, and medium-sized firms were more insulated from the shock, whereas firms’ reliance on air transportation for shipping goods amplified the shock. Trade bans and promotion measures implemented by governments in response to the pandemic had little impact on aggregate trade flows.

Subject: COVID-19, Exports, Health, Imports, International trade, Trade balance, Trade policy

Keywords: COVID-19, Exports, French firms, Global, Imports, Inventory intensity, Medium-sized firm, Shock propagation, Supply chains disruptions, Trade, Trade adjustment, Trade balance, Trade ban, Trade policy, Trade recovery

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/081
Stock No:

WPIEA2022081
ISBN:

9798400204364
ISSN:

1018-5941

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