Effect of Covid-19 Pandemic on international trade policy making:

Implications for businesses

Working Title
Direct effects of Pandemic Covid-19 on current financial models of global businesses along with
future implications
Background and literature review
The projected study is aimed to investigate the effects of COVID-19 on international trade and
how such effects changed over time. We will explore yearly data on worldwide trade from
January 2019 to January 2022. It will cover the responses undertaken by global companies and
governments in the early as well as lateral stages of the outbreak. The companies selected for the
analysis are limited to automobile, real-estate, and airline industry. The work of majority of the
authors as mentioned in below sections discussed in general the relation between economic
dynamics and pandemics from past events. The focus of the new research will be to discuss the
variably challenging and changing nature of Covid-19 effects on global trade by constructing
theoretical models from the past work.
Eichenbaum et al. (2020) used theoretical modelling to investigate the interaction between
pandemics and economic situations. According to their model, pandemic quarantine policies that
encourage reductions in interactions and work could indeed reduce the death rate pertaining to
the outbreak. Unfortunately, these policies have a negative effect on the economy and exacerbate
the effects of the subsequent recession. Barro et al. (2020) in their work use the Spanish flu and
WWI mortalities as indicators to estimate the economic effects that a pandemic could have on a
country. According to their calculations, a country's utilisation will fall by 6% and GDP will fall
by 8% on average.
According to Baldwin and Tomiura (2020), COVID-19 will have a nearly threefold financial
impact on the manufacturing sector solely. In their work the analyzed macroeconomics of the
Covid situation by assessing existing literature on different pandemics in the past. They
explained that pandemic's spotlight is primarily on the world's production heartland (East Asia),
and that its expansion to other manufacturing powerhouses such as inside United States and the
European Union (EU) would result in direct and massive supply shortages (which is evident right
now). Second, due to the supply-chain contagion effect, these instantaneous downturns in supply
chain would spread to other manufacturing sectors in less-affected countries. Third, demand
interruptions would undoubtedly result from economic and financial declines in consumer
spending, as well as potential investment delays.
 In his work, Sobieralski (2020) examines the effects of uncertainty shocks on airline
employment in context of the present pandemic. His research looked at the current
circumstances by looking at the industry's historical relationship with uncertainty shocks like
pandemics. He used the data from 1991 to 2019 of U.S Airline and government data sets in order
to analyze the effects of uncertainty shocks of pandemics on airline industry. This industry has
experienced a huge job loss of nearly 7%–13%. Surprisingly, bigger airlines have been hit harder
in terms of job losses, while airline companies have fared better (Sobieralski, 2020). The airline
industry is being highlighted not only because of its important role in the global economy, but
also because of the influence it has on a variety of other industries, including aircraft industry,
goods production (air cargo), automobile sales (alternate travel mode), and tourism.
(Martin et al., 2020). As a result, studying the airline industry's mitigation strategies during the
COVID-19 pandemic is critical in the strategy development process for other businesses as well.
Real estate markets, which include residential as projects, as well as commercial markets, are
increasingly changing challenges, similar to other industries. Milcheva (2021) assessed risk in
real-estate equities of US and selected Asian countries in their research by analyzing global
systematic shock factors. Building on their work the proposed work will examine the initial,
peak- days and current responses of real-estate markets to Covid-19.
 Despite the fact that numerous research studies have been published on the international
trade subject, the actual organisational practices in place during the pandemic are still largely
unknown, and are mostly discussed based on advice or general considerations rather than
empirical studies or concrete examples. Even through there is a strong connection between
corporate sustainability and COVID-19 crisis response, the exisiting literature has still yet to
investigate how organisations deal with this emergency situation. In this context, identifying
successful practises that have been incorporated in global organisations can assist other
companies in bringing stability and making judgments that appear to have worked in the past.
Global trade can be divided into two broad categories which includes goods (products) and
services. Physical goods account for the majority of international trade. Despite its growth,
service trade accounts for a much smaller proportion of total trade. Trade exchange of goods was
close to US$19 trillion in 2019 worldwide, whereas the trade in services was close to US$6
trillion (UNTACD, 2021). As a result of the pandemic's combined supply and demand shock in
various fields, international trade was impacted differently in different sectors and regions. The
proposed study will look at bilateral trade in the United States, Europe, and Asia to examine this
heterogeneity.
The sharp drop in global trade in 2020 has indeed been pervasive, but it has been more
prominent in developed countries, particularly in terms of their export markets. Beyond average
values, the world trade patterns for 2020 show some heterogeneity between countries. With the
exception of a few regions, international trade has dropped significantly, though the magnitude
of the declines has varied. Many East Asian countries, for example, have been performing much
better than the rest of the world. Furthermore, COVID-19's economic shutdowns have had a
greater impact on international trade in some sectors than others. In order to portray an
evaluation of major financial highlights, all of these factors will be analysed in the proposed
study. While COVID-19 has been the most important factor influencing trade patterns in 2020,
unsettled conflicts between the US and China also have an impact on global trade. Trade dispute
between the two advanced economies began in 2018 and culminated in several iterations of
tariffs imposed in 2019, resulting in a 15% reduction in bilateral trade in 2019.

Research Aim and Objectives

 1. Challenge for Policy Makers and Business Professionals in studying predictability of
business environment of different regions globally and in mitigating risks as a result of
supply chain disruptions.
2. Analysis of product-wise market including real-estate, automobile, airline and IT market
trends of various regions during Covid-19 pandemic from 2019 on-wards.
3. Quantitative country-wise comparison of imports and exports on various
products/services in order to demonstrate most effective strategies applied and future
pathway.

Methodology

Current situation of industrial Country-wise GDP growth camparison

sectors before and after pandemic
Strategies implemented by Reasons of trade imbalanced in
companies with a positive growth different regions
rate

Supply
Effect on
Chain Import/
Disruptions Export
Trade

Challenges for
policy makers FutureShort term & long-term plan
& business Implications
Role of corporate sustainabilityprofessionals development in global trade
practices in policy makinng Role of digitalization in business
Organizational practices to sectors
ensure stability
The investigation model of the proposed work will be two fold for major industrial businesses:
including both strategic as well as the operational responses. Airline, automobile and real-estate
markets were selected globally as these businesses are attached directly or indirectly to numerous
other fields and faced adverse effects. In dealing with the policy interventions with an aim to
limit the loss of financial capitals in different region due to this pandemic, findings will be
classified at strategic and operational levels. Strategic actions as well as successful financial
models used by policy makers will be presented. In practical terms, findings will focus on
formulating effective and sustainable business policies for governments globally.
This research will utilize Arksey and O'Malley's (Arksey & Malley, 2005) methodology, which
consists of five major stages: identifying the research question, classifying relevant articles,
identify appropriate writings, plotting the statistics, aggregating, summarizing, and documenting
the results. This procedure has been modified for the analysis of business articles in the projected
thesis. In order to help eliminate publications that were not relevant to our main research
question, which was to analyze the major industrial practices implemented in organisations to
manage the COVID-19 crisis, and future implications. Inclusion and exclusion criteria will be
developed for this purpose. The study will include articles describing corporate
sustainability practices implemented specifically to address the COVID-19 crisis, primarily in
North America, Asia, and the European Union, but also in a global context.
Data from airline, housing and automobile industry will be assessed from selected countries.
This data will be analyzed with respect to different stages of Covi-19 period from 2019 to 2022.
The analysis will present financial stats and insights on how policy makers kept on shifting trade
policies during this whole scenario. Afterwards, the imports and exports data of the countries in
the above mentioned industries will be summarized and plotted region-wise with respect to
Covid-19 severity situation. Corporate sustainability practices done by businesses which thrive in
pandemic will be presented in the later part of the research.
Countries which will be included in analysis will be major economies from Europe, Asia and
USA. Import/export data will be investigated differently from each other using statistical tools of
ANOVA and correlation analysis. The variables for the study will be niche industry, region and
time frame of trade. Then all these factors will be individually analyzed once data is collected.
Data of import/export of selected group of countries will be collected from World Bank
Datasheets from 2019-2022.
.Future research should consider existing studies on COVID-19 and should dig deeper on
possible links between other business markets than automobile, airline and real-estate. The
correlation between macro-economy and financial markets during Covid-19 pandemic is
required to be investigated in detail.

Time Scale & Resources

The choice of a methodology is not necessarily straightforward. It involves choosing between
descriptive statistics and modelling approaches. Descriptive statistics is the process of
categorizing and describing the information. While analyzing overall trade dynamic globally
there will be a key account on a few of some the variables in the analysis. The most natural
measure of a country’s integration in world trade is its degree of openness. In order to show the
data, a simple bar chat of residuals for the country of interest and selected comparators will be
developed in the analysis. Services are an important margin of trade growth for many countries.
The simplest way of illustrating graphically the rising importance of service exports is through a
line chart showing the share of service and goods exports in GDP. Sectorial growth of any
country in automobile, airline and real-estate will be portrayed through a “radar screen”. This
screen presents dominance of one sector over the other in a given time frame.
In order to get an insight of key challenges for policy makers different case studies involving
various industries will be presented. The fluctuations in the number of consumers or price hikes
will be analyzed through statistical data. Short term and long-term effects of the policies made by
the governments globally in reference to financial models will be discussed through existing
literature. These challenges will be depending majorly on supply and demand related concepts.
All the theories presented will be solely focused on financial models only.
Future implications will be presented keeping in account of the corporate sustainability concepts
and the chances of severe waves of pandemic Covid-19. These findings will be directly related to
generalized industrial sectors and regions.

References
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