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The effects of COVID-19 on trade, production, environmental quality and its implications for green economy

Author

Listed:
  • Dinkneh Gebre Borojo
  • Jiang Yushi
  • Miao Miao

Abstract

Purpose - This study examines the effects of COVID-19 on trade, production and environmental quality and provides policy implications on green recovery. Design/methodology/approach - The two-step Heckman method is applied to estimate the structural gravity specification of trade. Besides, the two-step system GMM model is used to estimate the effects of COVID-19 on production and environmental quality. Additionally, descriptive analysis and literature review have been used. Findings - The findings disclose that COVID-19 adversely affected the trade performance of the countries. The results further imply that the regional trade agreements (RTAs) can play a key mediating role in the post-COVID-19 trade recovery. Besides, the impact of COVID-19 on the output is substantially negative. However, the effect of COVID-19 on environmental quality is significantly positive. Originality/value - It is the first study of its kind to examine the effects of COVID-19 on trade, production and CO2emissions covering panel countries. Second, it provides a detailed analysis of firms planning to engage in the export sector. Moreover, it offers policy suggestions to consider environmental quality and green recovery. Besides, it examines the mediating role of RTAs in the relationship between trade and the pandemic.

Suggested Citation

  • Dinkneh Gebre Borojo & Jiang Yushi & Miao Miao, 2021. "The effects of COVID-19 on trade, production, environmental quality and its implications for green economy," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 49(8), pages 1340-1359, November.
    • Handle: RePEc:eme:jespps:jes-06-2021-0307
    DOI: 10.1108/JES-06-2021-0307
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    More about this item

    Keywords

    COVID-19; Trade; Production; Environmental quality; Green recovery; F14; F15;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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