Economic exposure to regional value chain disruptions: evidence from Wuhan’s lockdown in China

ABSTRACT

Production fragmentation across multiple regions can result in a regional shock propagating along value chains to a wider array of regions. We propose a methodological framework to measure the economic exposure to regional value chain disruptions due to city lockdown during Covid-19. The exposure index is evaluated by applying a hypothetical extraction method to a regionally extended inter-country input–output framework incorporating China’s interregional input–output table. Our methodology can be adapted to conduct disaster impact analyses at city, state and country levels. It provides a tool for the immediate assessment of the economic risks of value chain disruptions, enabling quick policy responses.

KEYWORDS:

• economic exposure
• Covid-19
• input–output model
• regional value chains
• disaster impact analysis

JEL:

• C67
• P25
• R15

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Additional information

Funding

The authors acknowledge the financial support given by the National Natural Science Foundation of China [grant numbers 71903186, 71874183, 71673269, 71733003 and 71988101], the Major Program of the National Fund of Philosophy and Social Science of China [grant number 19ZDA062], the National Key R&D Program of China [grant number 2021ZD0111204], and the MOE Social Science Laboratory of Digital Economic Forecasts and Policy Simulation at UCAS.