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

Author Name ZHANG Hongyong (Senior Fellow, RIETI)
Creation Date/NO. March 2021 21-E-014
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First Draft: March 2021
Revised: December 2021


Using quarterly aggregate-level data on Japanese manufacturing affiliates in major host countries, this paper examines the impact of COVID-19 on global production by multinational corporations. Our findings can be summarized as follows: First, we found significantly negative impacts of COVID-19 on the performance of Japanese affiliates, especially sales in Q2 2020. Second, local sales, exports to Japan, and exports to third countries almost recovered in Q4 2020, implying the resilience of multinational production and global supply chains. Third, lockdown policies, in particular workplace closure orders for all-but-essential workplaces had significant negative effects on the sales and employment of Japanese affiliates.

Published: Zhang, Hongyong, 2021. "The impact of COVID-19 on global production: Evidence from Japanese multinational firms," The International Economy, Volume 24 (2021), 142-165.