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The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (28 August 2023) | Viewed by 24790

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Prof. Dr. Cuihong Yang

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Guest Editor

Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China
Interests: input–output technique; global value chain; economic forecasting; macroeconomic analysis
Special Issues, Collections and Topics in MDPI journals

Dr. Kailan Tian

E-Mail Website
Guest Editor

Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China
Interests: global value chains; input–output analysis; industrial economics; environmental economics

Special Issue Information

Dear Colleagues,

The COVID-19 pandemic has brought about many changes—some of which were temporarily introduced only during the pandemic and some of which are permanent. Amongst the most visible examples are economic, social and environmental effects. Almost all industries, sectors and areas in all countries have been affected. Nevertheless, cities, regions and countries may have encountered differences in their epidemic situations. Cities, regions and countries have implemented different control measures at different phases in response to the pandemic. Differences in the level of economic development and medical services as well as in the epidemic situations and control measures are reflected in the varying impacts. As a result, COVID-19 has had seriously divergent impacts on sustainable development across regions, whether across developed versus developing countries or across different regions within a specific country.

There is an urgent need to collect and systematize knowledge about the effects of COVID-19 shock on sustainable regional development. Equally important are emerging strategies and policies aimed toward economic recovery. The main purpose of this Special Issue is to present the effects of COVID-19 on regional development and strategies for how to deal with them. Was it at all possible in such a difficult time to reduce the economic development gap between rich and poor and to maintain the principles of sustainable development? How can the problems be potentially dealt with?

In this Special Issue, original research articles and reviews are welcome. Research areas of interest may include (but are not limited to) the following:

Economic impact evaluation of COVID-19 and epidemic prevention and control measures on different cities, regions or nations
Impacts of COVID-19 on low-carbon economic transition and regional green economy development
Innovation of disaster impact analysis models (e.g., input–output model, general equilibrium, econometric regression, big data techniques and synthetic models)
The restructuring effects of COVID-19 on national, regional or global supply (or value) chains and the potential effects of value chain restructuring on regional development
Political and economic instruments (e.g., tax reduction, consumption incentive, monetary policy) adopted by local and national administrations to mitigate economic losses
The COVID-19 shock on supply chain resilience and the development of strategies for promoting higher supply chain resilience
The COVID-19 impact on regional inequality and income gaps
Digitalization induced by COVID-19 and sustainable regional development
Emerging pathways toward post-COVID-19 reset and recovery

We look forward to receiving your contributions.

Prof. Dr. Cuihong Yang
Dr. Kailan Tian
Guest Editors

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Keywords

economic and environmental effects of COVID-19
sustainable regional development
regional inequality
multi-regional input-output analysis
disaster impact analysis model
trade and services
logistics, including storage and transport of goods
supply chain resilience
sectoral impacts of COVID-19
emerging pathways towards economic recovery

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Published Papers (11 papers)

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Research

18 pages, 1020 KiB

Open AccessArticle

Exploring the Moderating Role of COVID-19 on the Adaptive Performance and Project Success: Inching towards Energy Transition

by Muhammad Haris, Qing Yang, Munnawar Naz Khokhar and Umair Akram

Sustainability 2023, 15(21), 15605; https://doi.org/10.3390/su152115605 - 3 Nov 2023

Viewed by 1069

Abstract

Globally, approximately one-third of greenhouse gas (GHG) emissions are attributed to the energy sector. The global efforts to reduce emissions by 45 percent by 2030 in pursuit of net-zero emission targets depend on the timely completion of renewable energy projects. Among numerous internal and external factors that influence the success of projects, the performance of the workforce in response to changing project dynamics is a key yet little-explored factor. As such, the complexities and uncertainties brought about by the COVID-19 pandemic only enhanced the intensity of existing challenges faced by the workforce. This study investigates the moderating impact of the COVID-19 pandemic on the relationship between adaptive performance and the success of wind power plants in Pakistan. By drawing a sample size of 345 project personnel and using SMART PLS 4, the findings indicate that adaptive performance is a desired attribute in the workforce, and it contributes significantly towards the success of wind power plants in Pakistan. In addition, the stress, disturbance in work-life balance, and physical issues due to COVID-19 weaken the relationship of adaptive performance with the project’s success. This study has implications for renewable energy projects’ stakeholders to not ignore this aspect of performance and support the workforce through training, development, and adaptive management practices, as well as making projects flexible enough to facilitate changes. In addition, this study provides theoretical implications that highlight how human agency is affected by external factors, which in this case is the COVID-19 pandemic. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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21 pages, 616 KiB

Open AccessArticle

Technology of Input–Output Analysis with CES Production: Application for Studying the Kazakhstan Supply Chain during the COVID-19 Pandemic

by Askar Boranbayev, Nataliia Obrosova and Alexander Shananin

Sustainability 2023, 15(19), 14057; https://doi.org/10.3390/su151914057 - 22 Sep 2023

Cited by 1 | Viewed by 1337

Abstract

Input–output analysis finds widespread application in estimating the shock effects on production networks within both local and global economies. We are developing a new technology for intersectoral analysis that takes into account the substitution of production factors within a complex supply network triggered by external or internal shocks. This technology is based on the explicit solution of a pair of convex programming problems: the resource allocation problem under the assumption of Constant Elasticity of Substitution (CES) technologies and the special dual Young problem. Solving these problems, we can ascertain the equilibrium inputs and price indexes of goods within the production network. In this paper, we apply this technology to analyze the economy of Kazakhstan in the context of the COVID-19 pandemic. Our calculations provide us with the means to discuss the macroeconomic responses of the multi-sectoral production network in Kazakhstan to both external and internal shocks stemming from the pandemic. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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16 pages, 590 KiB

Open AccessArticle

Does COVID-19 Exacerbate Regional Income Inequality? Evidence from 20 Provinces of China

by Wei Wan, Jue Wang and Weimin Jiang

Sustainability 2023, 15(15), 11894; https://doi.org/10.3390/su151511894 - 2 Aug 2023

Cited by 2 | Viewed by 1564

Abstract

The COVID-19 pandemic has had a profound impact on almost all aspects of society and the world’s economy. This study aimed to examine the impact of COVID-19 on regional income inequality in China. Based on provincial data from 20 provinces (covering 218 prefecture-level cities) for the period from 2013 to 2022, the study revealed the significant impact of COVID-19 on widening regional income inequality, using a continuous difference-in-differences (DID) model. The results were robust when applying a parallel trend test, lagging control variables, and alternative measures of regional income inequality to test the results. Additional analysis suggested that the adverse impact of COVID-19 on regional income inequality was increased by regions’ foreign trade dependence and their share in the service industry but may have been weakened by the development of the digital economy. The findings highlight the adverse effects of COVID-19 on regional income inequality. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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18 pages, 2610 KiB

Open AccessArticle

Research on the Impact of Global Economic Policy Uncertainty on Manufacturing: Evidence from China, the United States, and the European Union

by Yifei Li and Yuhang Bai

Sustainability 2023, 15(14), 11217; https://doi.org/10.3390/su151411217 - 18 Jul 2023

Cited by 1 | Viewed by 2075

Abstract

Events such as COVID-19 and the Russia–Ukraine conflict have significantly increased the uncertainty and volatility of global economic policies. In the context of economic globalization, the key question we investigate is whether global economic policy uncertainty will have different impacts on the manufacturing of the three major economies in China, the United States, and Europe Union. This study employs the time-varying parameter vector autoregressive (TVP-VAR) model to examine how global economic policy uncertainty (GEPU) affected manufacturing from March 2008 to March 2023. The empirical results show that the effects of GEPU are time varying; its short-term effects on Chinese manufacturing are slightly greater than its medium- and long-term effects, whereas its medium- and long-term effects on manufacturing in the United States (US) and European Union (EU) are significantly greater than its short-term effects. The impact of European debt crisis, the China–US trade war and Russia–Ukraine conflict on EU manufacturing is higher than that of China and the US, and the impact of the COVID-19 pandemic on China’s manufacturing is much smaller than that of the US and the EU; thus, Chinese manufacturing has a greater capacity for risk mitigation than US and EU manufacturing. This study not only provides a new perspective on the study of global economic policy uncertainty; it also provides new empirical evidence on how global economic policy uncertainty affects the manufacturing sector in China, the US and Europe and provides policymakers with guidance for decision making. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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21 pages, 1076 KiB

Open AccessArticle

Effects of Targeted Poverty Alleviation on the Sustainable Livelihood of Poor Farmers

by Xuechao Li, Yaxuan Luo and Huijuan Wang

Sustainability 2023, 15(7), 6217; https://doi.org/10.3390/su15076217 - 4 Apr 2023

Cited by 3 | Viewed by 4178

Abstract

It is crucial to conduct a comprehensive evaluation of the effectiveness of targeted poverty alleviation (TPA) policies in promoting sustainable livelihoods among impoverished populations, particularly in light of the COVID-19 pandemic. The existing literature, however, predominantly focuses on assessing the policies’ effectiveness in terms of income, while neglecting other critical dimensions of sustainable livelihoods. In line with sustainable livelihood theory, we utilized data from the Chinese Household Financial Survey Database from 2017 and 2019 and employed a fuzzy regression discontinuity (FRD) method to systematically examine the implementation outcomes of TPA policies through the lens of “capability-strategy-results”. Our analysis revealed that the implementation of TPA policies had a positive impact on the ability of poor households to cope with unexpected shocks, as evidenced by an increase in the accumulation rates of material, social, and financial capital. Furthermore, we observed an optimization of livelihood strategies among poor households, with a significant increase in the proportion of wage income. These policies also had a positive impact on their livelihood outcomes, such as a reduced likelihood of falling back into poverty and an increased possibility of escaping from marginal poverty without relying on government subsidies; however, some limitations require attention. Notably, our analysis revealed that the policies did not effectively improve the human capital of poor households. To further explore the heterogeneity of policy effects, we categorized poor households into three groups based on their farmer’s market participation ability and willingness. Our findings indicate that TPA policies effectively reduced poverty among households lacking labor force through government subsidies and saw an increase in the proportion of medical insurance reimbursement; however, households lacking motivation or capability did not experience positive outcomes in the short term. Therefore, future support policies should prioritize these vulnerable groups and monitor their progress closely. Moreover, our analysis revealed that migrant work is the primary livelihood strategy among the poor, and stabilizing their employment faces significant challenges amid the COVID-19 pandemic. Consequently, additional policies and interventions are needed to address the adverse impact of the pandemic on the employment and livelihoods of low-income households. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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19 pages, 1092 KiB

Open AccessArticle

Will the COVID-19 Pandemic Outbreak Intensify the Resource Misallocation in China’s Food Production?

by Ying Sun, Jin Fan and Weiguo Jia

Sustainability 2023, 15(6), 5255; https://doi.org/10.3390/su15065255 - 16 Mar 2023

Cited by 1 | Viewed by 1736

Abstract

Resource misallocation is one of the important manifestations of agricultural supply-side distortion and an important causal factor that hinders food production increase and affects food security. Did the COVID-19 pandemic intensify China’s food production misallocation? The extent and consequences require quantitative assessment and scenario analysis. In this paper, we use a combination of input-output model and computable general equilibrium (CGE) model, and further incorporate the most important input factor in agriculture—intermediate inputs—into the model. At the same time, simulation of the pandemic impact from the demand and supply sides, respectively, and scenario analysis of the impact of the COVID-19 pandemic on China’s food production. The results of the study show that: first, compared with the baseline level before the epidemic, the overall TFP growth of China’s food industry chain decreased, and the TFP growth rate of the food distribution sector decreased most significantly. Second, there are significant factor misallocation distortions of capital, labor, and intermediate inputs. Third, in the short term, the period of the COVID-19 pandemic led to a decline in the vitality of the national labor market, but the return of non-farm employed labor in rural areas instead reduced the degree of labor misallocation in the food sector. Fourth, the demand side has a greater impact on China’s food production, among which the consumer demand has a particularly strong impact on the resource allocation of food production, and the short-term shock will mainly have a more obvious impact on the allocation of labor factors and the allocation of intermediate input factors in the food industry chain. Accordingly, this paper proposes that in order to guarantee China’s food security and adapt to the short-term characteristics of the era when the COVID-19 pandemic is rampant, China should make efforts in four areas: rational allocation of food production resources and factors, solid construction of the whole food industry chain, stable guarantee of the food market system and transfer to enhance social expectations. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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15 pages, 1511 KiB

Open AccessArticle

The Impact of Industrial Linkage Structures on Urban Economic Resilience in China in the Context of the COVID-19 Shock

by Shanshan Ye and Mingming Cao

Sustainability 2023, 15(6), 5011; https://doi.org/10.3390/su15065011 - 11 Mar 2023

Cited by 4 | Viewed by 1874

Abstract

The structures of industrial linkages form an essential basis for the economy and have an important impact on urban economic resilience. By analyzing the impact of COVID-19 on China’s urban economy in 2020, this study uses China’s national input–output table to measure the centrality and diversity of industrial linkage structures. Extracted data from 298 cities in China are used to explore the impact of centrality and diversity on urban economic resilience. The results show that the cities in East China, Central China, and the Chengdu–Chongqing area in western China have a high centrality with respect to industrial linkage structures. Cities in the Yangtze River Delta, Pearl River Delta, the middle reaches of the Yangtze River city cluster, and the Chengdu–Chongqing city cluster have a high diversity of industrial linkages structures. During the shock of the COVID-19 pandemic, most cities in China have shown high economic resilience. For cities across the country, diversity shows a significant and positive correlation with economic resilience, and centrality shows a significant and positive correlation with economic resilience. The latter displays an inverted U-shaped relationship between centrality and economic resilience. For cities with different population sizes, there are differences in the impacts of centrality and diversity on urban economic resilience. Different industrial policies can be developed to adjust the centrality and diversity of the cities to enhance urban economic resilience. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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22 pages, 757 KiB

Open AccessArticle

A Demand-Side Inoperability Input–Output Model for Strategic Risk Management: Insight from the COVID-19 Outbreak in Shanghai, China

by Jian Jin and Haoran Zhou

Sustainability 2023, 15(5), 4003; https://doi.org/10.3390/su15054003 - 22 Feb 2023

Cited by 5 | Viewed by 1950

Abstract

This paper proposes the dynamic inoperability input–output model (DIIM) to analyze the economic impact of COVID-19 in Shanghai in the first quarter of 2022. Based on the input–output model, the DIIM model introduces the sector elasticity coefficient, assesses the economic loss of the system and the influence of disturbances on other sectors through sectoral dependence, and simulates the inoperability and economic loss changes through time series. A multi-evaluation examination of the results reveals that the degree of inoperability of sub-sectors is inconsistent with the ranking of economic losses and that it is hard to quantify the impact of each sector directly. Different from the traditional DIIM model that only considers the negative part of the disaster, the innovation of this paper is that the negative value of the inoperability degree is used to measure the indirect positive growth of sectors under the impact of the Shanghai pandemic shock. At the same time, policymakers need to consider multi-objective optimization when making risk management decisions. This study uses surrogate worth trade-off to construct a multi-objective risk management framework to expand the DIIM model to enable policymakers to quantify the trade-off between economic benefit and investment costs when making risk management decisions. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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22 pages, 635 KiB

Open AccessArticle

A General Equilibrium Analysis of Achieving the Goal of Stable Growth by China’s Market Expectations in the Context of the COVID-19 Pandemic

by Jin Fan, Hongshu Wang and Xiaolan Zhang

Sustainability 2022, 14(22), 15072; https://doi.org/10.3390/su142215072 - 14 Nov 2022

Cited by 2 | Viewed by 1726

Abstract

The COVID-19 pandemic triggered a weakening of expectations of market players and local governments. It is necessary to explore some effective paths to stabilize China’s market expectations. This paper draws on computable general equilibrium (CGE) model elasticity indicators and marginal utility indicators to simulate the impact of the COVID-19 pandemic on market agents and the impact of shocks brought about by the COVID-19 pandemic on various industry sectors. Our results first show that the Keynesian closure is still valid, with the impact values of the COVID-19 pandemic on GDP, urban consumption, rural consumption, investment, imports, and exports being 2.35%, 7.96%, 9.79%, 4.10%, −3.13%, and 6.15%, respectively, with the COVID-19 pandemic shock having a particularly strong impact on rural consumption. Second, the impact of the COVID-19 pandemic on different industries is comprehensive and non-equilibrium. In consumption, urban and rural residents have the largest changes in consumption demand in the tertiary and primary industries, and the overall change in consumption of rural residents is larger than that of urban residents. In investment, the tertiary industry investment changes most significantly, while the primary industry has a gentle change. The impact of weaker import and export expectations on industry imports and exports is concentrated in the secondary and primary industries. Third, the weakening expectation induces a decline in the multiplier effect, making it difficult for economic growth to return to pre-pandemic levels, which needs to be accompanied by fiscal policies such as reducing taxes, lowering fees, and raising fiscal spending to achieve growth targets. In addition, while fiscal policy significantly boosts import and export trade, it has a significantly greater impact on exports than imports. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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16 pages, 949 KiB

Open AccessArticle

The Impact of Sustainable Development of Cold Chain Logistics on China’s COVID-19 Pandemic

by Xia Li, Yifang Liu and Huijuan Wang

Sustainability 2022, 14(16), 10358; https://doi.org/10.3390/su141610358 - 19 Aug 2022

Cited by 3 | Viewed by 3144

Abstract

Currently, there are multiple COVID-19 outbreaks in China’s imported cold chain product logistics. Cold chain logistics (CCL) have become an important source and weak link of China’s epidemic risk. This article discusses the differential effect of CCL on COVID-19 epidemic risk in different regions of China from an econometric analysis perspective. By comparing the development level of China and foreign countries, it can be observed that the sustainability of CCL may be a key factor affecting the risks of the epidemic. This article confirms the inverse correlation between the level of sustainability of CCL and the risk of epidemics from both mechanism analysis and empirical tests. Developing sustainability is not only beneficial to the development of the CCL industry itself but also an effective way to mitigate the risk of epidemics. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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22 pages, 653 KiB

Open AccessArticle

The Global Value Chain and Welfare Effects of Tariffs—Counterfactual Analysis of Sino–US Economic and Trade Frictions

by Mengzhou Qin, Zijie Fan and Yuan Zhong

Sustainability 2022, 14(14), 8280; https://doi.org/10.3390/su14148280 - 6 Jul 2022

Viewed by 2422

Abstract

This paper aims to study the impact of Sino–US (China–United States) trade frictions on global value chains and welfare changes. We introduce the general equilibrium model for multi-country and multi-sector heterogeneous enterprises and combine it with an input–output structure. The results show that the additional tariffs on China and the US reduce bilateral trade and affect the overall imports and exports of both countries to varying degrees. The results show that the additional tariffs on China and the US affect both countries’ overall imports and exports to varying degrees. The impact of the trade of manufactured goods is greater than that of the trade of intermediate goods. The welfare effect in China has dropped by 0.163%, while the corresponding effect in the US has improved by 0.016%. The main reason for the decline in China’s welfare is the deterioration of the terms of trade. Increased tariffs between China and the US can reduce bilateral trade between the two countries, particularly in intermediate goods, and can cause a reorganization of global value chains in both regions. Full article

(This article belongs to the Special Issue The Effects of COVID-19 Shock on Sustainable Regional Development and Emerging Pathways toward Economic Recovery)

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