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Impact of covid-19 on trade in services

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  • Ando, Mitsuyo
  • Hayakawa, Kazunobu

Abstract

In past shocks (e.g., the 2008–2009 global financial crisis), the services trade was found to be more resilient than the goods trade. However, the ongoing novel coronavirus disease 2019 (COVID-19) pandemic has restricted people’s cross-border mobility, which is fatal to the services trade because it often requires physical proximity between suppliers and consumers. We empirically examine the impact of COVID-19 on the services trade using quarterly data from 146 countries in 2019 and 2020. Its severity is measured according to the number of cases, the number of deaths, and an index measuring the severity of lockdown orders. We found that COVID-19 had a significantly negative impact on the services trade. Moreover, the extent of the impact varied among disaggregated services sectors, reflecting the nature of services. Travel services were the most affected, followed by transport services and construction services. The harmful effects on the trade in these services were more serious than those on the goods trade.

Suggested Citation

  • Ando, Mitsuyo & Hayakawa, Kazunobu, 2021. "Impact of covid-19 on trade in services," IDE Discussion Papers 824, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper824
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    References listed on IDEAS

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    Cited by:

    1. Adrian Tudor Tudorache & Luminița Nicolescu, 2023. "Insights about the Effects of COVID-19 on International Trade during the Main Pandemic Years in Romania and Poland," Sustainability, MDPI, vol. 15(11), pages 1-20, May.
    2. Georgeta Ilie, 2023. "Trade In Skill-Intensive Services - Through the Pandemic and Accelerating Digitalization," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 11(1), pages 73-83, May.
    3. Hayakawa, Kazunobu & Hyun-Hoon, Lee & Cyn-Young, Park, 2022. "Impacts of COVID-19 on foreign direct investment," IDE Discussion Papers 831, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Witold Chmielarz & Marek Zborowski & Xuetao Jin & Mesut Atasever & Justyna Szpakowska, 2022. "On a Comparative Analysis of Individual Customer Purchases on the Internet for Poland, Turkey and the People’s Republic of China at the Time of the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(12), pages 1-21, June.
    5. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    Novel coronavirus disease 2019 (COVID-19); Trade in services; Balance of payments;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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