Supply Spillovers During the Pandemic: Evidence from High-Frequency Shipping Data

IMF Working Papers, December 18, 2020

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World trade contracted dramatically during the global economic crisis induced by the COVID-19 pandemic.
Disruptions in international supply chains were widely reported as governments imposed containment measures (lockdowns) to halt the spread of the disease.
Demand declined as households and firms scaled back spending.
The paper attempts to disentangle the supply and demand channels in trade by quantifying the causal effect of supply spillovers from lockdowns.
The authors find strong but short-lived supply spillovers of lockdowns through international trade.
The evidence is suggestive of the downstream propagation of countries’ lockdowns through global supply chains.

Utilizes a novel dataset of daily bilateral seaborne trade.
Designs a shift-share identification strategy that leverages geography-induced cargo delivery lags to track the transmission of supply disruptions across space.

Strong but short-lived supply spillovers of lockdowns through international trade.
Evidence is suggestive of downstream propagation of countries’ lockdowns through global supply chains.

Subject: COVID-19, Financial sector policy and analysis, Foreign currency exposure, Health, Imports, International trade, Money, Plurilateral trade, Spillovers
Keywords: Asia and Pacific, COVID-19, Europe, Foreign currency exposure, Global, government lockdown, import growth, Imports, lockdown exposure, lockdown measure, lockdown spillover, lockdowns, Plurilateral trade, spillovers, supply chains., supply disruption, trade, WP