Can E-commerce Mitigate the Negative Impact of COVID-19 on International Trade?

Discussion Papers

No.808

by Kazunobu Hayakawa, Hiroshi Mukunoki, and Shujiro Urata

February 2021

ABSTRACT

This study aims to empirically investigate the role of E-commerce (EC) on the trade impacts of COVID-19. To this end, we estimate gravity equations for bilateral trade among 34 reporting countries and their 145 partner countries during January–August in 2019 and 2020. Our major findings can be summarized as follows. A larger number of confirmed cases or deaths in both importing and exporting countries significantly decreases international trade. However, we found that EC development in importing countries contributes to mitigating this negative effect of COVID-19 on trade while that in exporting countries does not. These results are robust for our use of multiple measures of EC development.

Keywords: COVID-19, E-commerce, Trade

JEL classification:F15, F53

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