COVID-19, lockdowns and international trade: evidence from firm-level data.

The COVID-19 pandemics and the lockdowns imposed to mitigate the rise of infections beyond manageable levels strongly affected international trade. Although the health crisis and the mobility restrictions associated with lockdowns are closely related, their impacts on international trade have a different nature. This paper uses monthly firm-level trade data for Portuguese firms to measure the impact of partner countries' lockdowns on nominal export and import flows during 2020 and the first half of 2021, while also assessing the impact of the health crisis. The high time frequency and granularity of the data contribute to the identification of the impact of these obstacles on trade. We conclude that the detrimental impact of lockdowns is sizeable and broadly similar in exports and imports, and the impact of the health conditions is slightly stronger in exports. There is evidence that the detrimental impact of lockdowns was stronger for larger firms, for those with higher geographical concentration of trade, more integrated in global value chains and in the upper quartiles of the trade unit value distribution. The negative impact is also estimated to be larger for industries with high import content and for trade partners that are more important as sources of value added to be embodied in Portuguese exports. Results also suggest that exports adapted to the prevailing circumstances as of June 2020, but such an effect is not clear in imports.