Trade and the COVID-19 Pandemic: Lessons from French Firms
IMF Working Papers, May 6, 2022
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- Trade and the COVID-19 Pandemic: Lessons from French Firms
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Bibliographic details
- Authors: Mariya Brussevich, Chris Papageorgiou, Pauline Wibaux
- Published: May 6, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400204364.001
Summary and principal findings
- Uses granular customs data from France to investigate propagation of the COVID-19 shock along supply chains in 2020.
- 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).
- Adjustment along the extensive margin played a more important role in trade with developing countries.
- The impact of lockdowns was stronger for final consumer goods.
- The trade recovery was predominantly demand-driven.
- Trade bans and promotion measures implemented by governments in response to the pandemic had little impact on aggregate trade flows.
Heterogeneous firm responses and amplifying/mitigating factors
- More automated firms were more insulated from the shock.
- Inventory-intensive firms were more insulated from the shock.
- Older firms were more insulated from the shock.
- Medium-sized firms were more insulated from the shock.
- Firms’ reliance on air transportation for shipping goods amplified the shock.
Methodology and scope
- Timeframe: 2020 (propagation of the COVID-19 shock along supply chains in 2020).
- Data source: granular customs data from France.
- Focus: trade adjustment along intensive vs. extensive margins; differences by destination (developing countries), by product type (final consumer goods), by firm characteristics (automation, inventory intensity, age, size), and by transport mode (air).
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- Working Paper