Lockdowns and export growth: the role of domestic production networks

This study investigates the role of domestic production networks in transmitting lockdown shocks originating in upstream and downstream provinces and shaping export performance in the focal province. Using a firm-to-firm transaction-based interprovincial input–output table to construct exposure measures, we find that a one-standard-deviation increase in downstream lockdown exposure reduces export growth by 13.6 log points, whereas upstream lockdown exposure has negligible effects. The impact is short-lived and concentrated in ordinary trade, differentiated products, and durable goods. These findings indicate complementarity between domestic sales and exports. Our evidence supports the economies of scale channel over liquidity constraints.