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.