Linking FDI topology with COVID-19 Pandemic

Papers in Evolutionary Economic Geography (PEEG) nr. 20/54, Utrecht University

DISEI Working Paper - Economics nr. 18/2020, University of Florence

32 Pages Posted: 1 Dec 2020

See all articles by Roberto Antonietti

Roberto Antonietti

University of Padova - "Marco Fanno" Department of Economics and Management

Giulia De Masi

Zayed University

Giorgio Ricchiuti

DISEI, Università degli Studi di Firenze

Date Written: October 2020

Abstract

Globalization has considerably increased the movement of people and goods around the world, which constitutes a key channel of viral infection. Increasingly close economic links between countries speed up the transfer of goods and information, and the knock-on effect of economic crises, but also the transmission of diseases. Foreign direct investment (FDI), in particular, establishes clear ties between countries of origin and destination, and it is along these chains that contagious phenomena can unfold. In this paper, we investigate whether countries with more central positions in the global production network have higher COVID-19 infection and mortality rates. We merge data on EU-28 outward FDI with data on COVID-19 per capita infection and death rates to analyze their association with the topology of the FDI network. Our estimates reveal that countries most exposed to the COVID-19 outbreak are those characterized by a more central role in the global production network. This result is robust to the use of alternative measures of network centrality, and to the possible influence of the 2008 financial crisis on the structure of the global production network. We also find that exposure to the pandemic increases with the centrality of a country in the FDI network of certain industries, including business machinery and equipment, business services, real estate, tourism, and transport.

Keywords: foreign direct investment, economic networks, centrality measurements, COVID-19, pandemic

JEL Classification: F23, D85

Suggested Citation

Antonietti, Roberto and De Masi, Giulia and Ricchiuti, Giorgio, Linking FDI topology with COVID-19 Pandemic (October 2020). Papers in Evolutionary Economic Geography (PEEG) nr. 20/54, Utrecht University, DISEI Working Paper - Economics nr. 18/2020, University of Florence, Available at SSRN: https://ssrn.com/abstract=3736648 or http://dx.doi.org/10.2139/ssrn.3736648

Roberto Antonietti (Contact Author)

University of Padova - "Marco Fanno" Department of Economics and Management ( email )

via Del Santo 33
Padova, PD 35123
Italy
+390498271508 (Phone)
+390498274211 (Fax)

HOME PAGE: http://www.economia.unipd.it/category/ruoli/personale-docente?key=4FD07667CE6DC0DA28DDD61A73393A5F

Giulia De Masi

Zayed University ( email )

P.O. Box 4783
Abu Dhabi
United Arab Emirates

Giorgio Ricchiuti

DISEI, Università degli Studi di Firenze ( email )

Via delle Pandette, 9
Firenze, Florence 50127
Italy

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