Abstract
The COVID-19 pandemic is an unexpected-extreme event and has considerably impacted the national and regional economies. This paper emphasizes the importance of industrial structure for a region’s resistance to the recessionary shock. Two significant factors that may determine the regional industrial structures in this ongoing recession include the relative composition of essential/non-essential sectors and the intensity of face-to-face interactions. Considering these factors, we focus on two groups of industries: essential industry with low interpersonal interactions and non-essential industry with high interpersonal interactions. The specialization in these industries is associated with the regional economic resistance to the COVID-19 induced recession. Estimation results from the ordinal logistic regression models show that essential industries with low interpersonal interactions, especially the retail and service sectors––for instance, non-store retailers and financial and professional service––are significantly related to regional economic resistance, and their relationship intensifies compared to other sectors during the COVID-19 pandemic. However, states specialized in the non-essential industries with high interpersonal interactions are less likely to resist economically during the lockdown-COVID and until the stabilizing-COVID period. In addition, a state that quickly recovered from the 2001 recession is more likely to resist the pandemic shock during early- and lockdown-COVID periods. Findings in this paper indicate the importance of regional industrial structure to determine the level of vulnerability to unexpected recessionary shocks. Additionally, identifying the vital factors to determine the industrial structure based on the type of shock is found to be crucial.Supplementary InformationThe online version contains supplementary material available at 10.1007/s00168-022-01134-w.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.