We use cookies on this website to give you a better user experience. By continuing to browse the site, you are agreeing to our use of cookies. Learn more

The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms

The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms
Date:
26 March 2021
Category:
Connectivity, COVID-19
Authors:
Hongyong Zhang
Tags:
Connectivity, COVID-19, East Asia, global value chains, Japan

Print Article:

Using aggregate-level data on Japanese multinational corporations (MNCs) in major host countries and regions, this paper investigates the impact of COVID-19 on global production and supply chains with a focus on East Asia. I use the numbers of COVID-19 cases and deaths as measures of the impact of the pandemic. I find that the pandemic had substantial impacts on the performance (sales, employment, and investment) of Japanese MNCs and global supply chains (exports to Japan and exports to third countries) in Q1–Q3 2020. China recovered quickly in Q2 and grew in Q3, whilst the countries of the Association of Southeast Asian Nations and the rest of the world had still not fully recovered in Q3 2020. Importantly, lockdown and containment policies in host countries had large negative impacts on the sales and employment of Japanese MNCs. In contrast, I did not find positive effects of economic support policies on firm performance. Interestingly, whilst the firm expectations and business plans of Japanese MNCs were negatively affected by the COVID-19 pandemic, their business confidence increased with strong overall government policy responses in host countries in Q1 2020.

This research was conducted as a part of the project ‘ERIA Research on Covid-19’ at the Economic Research Institute for ASEAN and East Asia (ERIA).

The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms

Search ERIA.org

Latest Multimedia

Indonesia's ASEAN Chairmanship 2023 High-Level Policy Dialogue: ASEAN Digital Community 2045

ERIA Knowledge Lab Discusses Scaling Up Innovation and Digital Technology Ecosystem

Is ASEAN Ready for Electric Vehicles? | ASEAN Insights Podcast

Related Articles

ASEAN, China, COVID-19, Trade
29 March 2021
Editor(s)/Author(s): Kozo Kiyota
Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the[...]
COVID-19, industry and manufacturing, Japan, Trade
29 March 2021
Editor(s)/Author(s): Mitsuyo Ando
Abstract: This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding[...]