Understanding the impact of COVID-19 supply disruptions on exporters in global value chains
In this context, the further upstream the disruption occurs, the greater is the potential for supply bottlenecks to propagate negative shocks.
- In this context, the further upstream the disruption occurs, the greater is the potential for supply bottlenecks to propagate negative shocks.
- The third phase was from September 2020 to the end of 2021, when disruptions to global supply chains emerged and progressively intensified.
- Within this sample, our treatment group comprises all exporting firms that had imported intermediate inputs at least once over the same period.
- We assess firms’ performance during the crisis, in terms of export sales and probability of survival in the export market.
- The richness of the dataset allows us to then deepen our analysis and look at several sources of heterogeneity.
- In April 2020 GVC exporters recorded export volumes that were 42% lower than the levels recorded in January 2020.
- Chart 2 illustrates the estimated effect of participation in global value chains on firm-level exports.
- We find that participation in GVCs increased firm vulnerability during the pandemic, with the negative impact of supply disruptions being greater for firms located relatively more downstream in the value chain.
- In this article we investigate the impact of supply chain linkages on exporting firms during the pandemic.
- Highly granular data for the universe of French exporters allow us to provide one of the first firm-level quantifications of the impact of supply bottlenecks that occurred in 2021, when disruptions along value chains were at historically high levels.
- We find that exporters in global value chains suffered relatively more than other exporters during the COVID-19 crisis.
- This additional negative effect was mostly driven by exporters at downstream production stages, whereas diversifying sourcing networks for core imports helped to buffer the impact.