The impact of COVID-19 on economic globalization: Based on the perspective of factor flow

ABSTRACT

When economic globalization develops vigorously, there is also the phenomenon of anti-globalization. The global epidemic of COVID-19 broke out in early 2020 in this economic backdrop. How does COVID-19 affect economic globalization? Will COVID-19 further exacerbate the tide of anti-economic globalization? International trade gradually turns from commodity trade to factor flow after economic globalization. Therefore, this paper discusses the impact of COVID-19 on economic globalization from the perspective of factor flow. This paper finds that COVID-19 causes the deterioration of the market environment. The deterioration of the market environment leads to the restriction of production and the decline of purchasing power, which may temporarily restrain the economic development within countries. Strict import and export controls have reduced or even temporarily disrupted the flow of factors between countries with close trade links. The consequence of the disruption is that International direct investment projects may be delayed by the emergence of COVID-19, that factor resources of the investing country may not be integrated with host country resources, and that economic globalization is temporarily hindered. © 2021 ACM.