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COVID-19, Lockdowns and International Trade: Evidence from Firm-Level Data
C23 - Models with Panel Data
F14 - Country and Industry Studies of Trade
The COVID-19 pandemics and the lockdowns imposed to mitigate the rise of infections beyond manageable levels strongly affected international trade in the early months of 2020. Although the health crisis and the mobility restrictions associated to lockdowns are closely related, their impacts on international trade have a different nature. This paper uses monthly firm-level trade data for Portuguese firms to measure the impact of lockdowns on nominal export and import flows during 2020 and the first half of 2021, while also assessing the impact of the health crisis. The high time frequency and granularity of the data contribute to the identification of the impact of these obstacles on trade. We conclude that the detrimental impact of lockdowns is sizeable and broadly similar in exports and imports, and the impact of the health conditions is slightly stronger in exports. There is evidence of a lower impact of lockdowns as of June 2020, hinting at a progressive adaptation of international traders to the prevailing circumstances. Notwithstanding this adaptation, the impact of lockdowns partly remerged in the third wave of the pandemics, notably on imports flows. There is also evidence that the impact of lockdowns was stronger for larger firms and for those more integrated in global value chains.