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Resilience of Japanese Multinational Enterprise Production Networks during the COVID-19 Pandemic

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  • Liang Licheng

    (Graduate School of Economics Keio University)

Abstract

We use COVID-19 as an exogenous shock to analyze the impact of the COVID-19 pandemic on Japanese multinational affiliates’ performance, determining that the pandemic adversely impacted performance in general, but severe disruptions did not last longer than one year. The COVID-19 shock also affected global transaction networks, and affiliates’ total sales were severely affected by procurement challenges. Regarding heterogeneous effects, affiliates actively engaged in trade experienced worse conditions than local-oriented firms. Finally, we explore whether and which local backward linkages could mitigate such shocks, concluding that affiliates’ local procurement from companies beyond only Japanese firms could gain resilience.

Suggested Citation

  • Liang Licheng, 2024. "Resilience of Japanese Multinational Enterprise Production Networks during the COVID-19 Pandemic," Asian Economic Papers, MIT Press, vol. 23(1), pages 175-201, Winter/Sp.
    • Handle: RePEc:tpr:asiaec:v:23:y:2024:i:1:p:175-201
    DOI: 10.1162/asep_a_00879
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