COVID-19 Medical Trade: Multilayer Network Analysis and Network Determinants

Abstract

This paper uses insights from new economic geography (NEG) to examine eight commodities that span the COVID-19 medical value chain from 2000 to 2020 based on the multilayer network approach. Such an approach is distinguished from single layer approaches by taking into consideration interlayer connections. Centrality measures are based on the HITs algorithm to identify dominant exporters (hubs) and importers (authorities). We further examine the determinants of the multilayer trade networks with a gravity model. Three results are reported. First, the core-periphery structure under NEG has weakened over time with the internationalization of production in certain Covid medical commodities (CMCs). Second, home market effect remains relatively strong over time reflecting the role of NEG’s agglomeration economies in locations with large home market demand. Finally, countries that restricted certain CMCs (especially PPEs and masks) even as they simultaneously facilitated the imports of other CMCs saw a decrease in exports.