CSSI Report

CSSI INTERNSHIP
'CO' stands for corona, 'VI' for virus, and 'D' for disease
Impact of COVID 19 on industry
Institute Name : PANDIT DEENDAYAL ENERGY UNIVERSITY

Author’s Name : Aniket Gupta
Author’s Roll No : 20BCP049
Course Name : Computer Engineering (CE)
Date of Submission :
1 | 20BCP049 Aniket Gupta

CSSI INTERNSHIP
AIM
 The problem topic for the research is “IMPACT OF COVID 19 ON

INDUSTRY”.
 The main motive for the following topic is to as the India prepares for a
COVID-19 recovery, policymakers need to understand why some cities
and communities were more vulnerable to the pandemic’s economic
consequences than others..
 The main problems we generally know are about the economic impact
on individual with several problems faced due to no work and complete
lockdown.
 Policies made for this has made a huge impact on many Countries
economies in the form of not lowering the GDP by opening small works
and work from home policies for various jobs .
 And to get aware of the consequences of the disease that not only
middle class but some big personalities also get bankrupt due to this
situation.
 In this internship our main goal is to know about the problems of
industry and to understand their situation and to get motivated from
their stories.
This proposal will answer various prospects that you need to know
about which will fill gap between the myths and reality of the society on
economy (Industry).

CSSI INTERNSHIP
Introduction
“ You only live once, but if you do it right, once is enough.”
— Mae West.
 The effects of COVID-19 are far reaching and have caused
unprecedented change.
 Businesses and organizations face economic and operational

uncertainty across every industry and sector. Now more than
ever is the time to understand compliance, adjust
expectations, renew focus and reposition in the wake of the
next normal.
 The motivation to write and present the paper is not to make everyone
aware about this worsening crisis but also provide a ray of hope that it
is never too late and we can fix this effectively just by making use of the
technologies we possess .
 Business leaders are facing a time of great change and reinvention. The
impacts of COVID-19 have touched nearly every facet of an
organization, from payroll to auditing standards to how organizations
conduct day-to-day operations.
 The emergence and spread of COVID-19, caused by the

severe acute respiratory syndrome corona virus 2 (SARS-
CoV-2), has forced countries worldwide to implement Non-
Pharmaceutical Interventions (NPI) to reduce the spread of
the virus .These NPI, which include among others
international travel restrictions, business closures,
prohibition of large-scale private and public gatherings, and
mandatory quarantines, have shown to effectively reduce the
rate of transmission of the virus . As a consequence,
however, such policies have had large economic
CSSI INTERNSHIP
repercussions, both in terms of domestic industry output and

international trade, due to diminishing production and
reduced demand for some goods. For instance, model-based
estimates show that the global industry value-added may
have dropped by 25–40%, depending upon the scale and
severity of the implementation of NPI .
Quantifying the costs and benefits of various NPI on the economy

and global trade is necessary to inform effective policy responses
and to navigate the trade-off between slowing the pace of the
pandemic and limiting economic impacts . However, monitoring the
extent, and understanding the underlying causes, of the economic
disruption on a global scale is hard for three reasons; (1) the
traditional macroeconomic indicators (e.g. trade, industry output)
are often published at several months of delay, (2) their aggregate
nature makes it hard to decipher the importance of various impact
mechanisms, and (3) macroeconomic indicators are primarily
available for high and upper middle-income countries, thereby
limiting our ability to understand what is happening in low- and
middle-income countries. Therefore, alternative, higher temporal
frequency, proxy data of economic activity with a global extent
could help improve our understanding of the unfolding economic
disruptions to economies globally . Moreover, one could leverage
the cross-country heterogeneity in timing and severity of NPI to
examine the economic impacts of individual NPI across countries.
A growing body of literature has used high-frequency data (HFD),

such as electricity consumption , air pollution , night-time light
intensity and human mobility , to track the evolution of the
pandemic on a country and global scale. In addition, recent
research has used HFD sources to quantify the effect of individual
NPI on domestic economic output . For instance, Fezzi and
Fanghella used daily electricity consumption data for Italy and
found that the 3 weeks of severe lockdown reduced the national
GDP by almost 30%. Deb et al. used a variety of HFD to estimate the
individual impacts of NPI, showing that workplace closures and
stay-at-home orders had the largest economic costs. However,
proxies such as electricity consumption and human mobility are
often hard to relate directly to economic impacts, making it difficult
to infer a causal relationship between NPI and economic activity. In
addition, these studies often only include countries for which these
HFD are available and rarely include countries in the Global South
or island nations, making it hard to generalize the results.

CSSI INTERNSHIP
In this research, we present a high-frequency dataset of maritime

trade flows derived from empirical vessel tracking data, which we
use to track the status of global maritime trade during the first eight
months of the pandemic. We do this by tracking vessel movements
in almost 1200 ports globally in combination with a newly
developed algorithm that allows us to estimate trade flows based
on this data. Maritime trade flows cover around 80% of the world’s
trade in terms of volume , and can hence be used as a first-order
indicator of the status of economic activity in a country and trade
between countries. We then apply an econometric model to
estimate the impacts of specific NPI on exports by making use of
the heterogeneity in the diversity, timing and severity of NPI across
countries. The newly derived dataset has a high spatial (166
countries) and temporal (daily) resolution, which helps to track the
impacts of the COVID-19 outbreak across a large sample of
countries, and provides a more comprehensive picture of changes
in economic activity compared to alterative HFD.
We estimate that, globally, maritime trade reduced by 7–9.6%

during the first months of 2020, which is equivalent to around 225–
412 billion USD. However, large sectoral and geographical
disparities are found, with manufacturing sectors being hit the
hardest, as well as small island developing states and low-income
economies suffering the largest relative losses. We find a negative
relationship, robust across different model specifications, between
the implementation of COVID-19-related school and public
transport closures on country-wide exports. Overall, we provide
evidence of how the impacts upon global maritime trade are
complex and dependent on the trade-dependencies, sector-
composition and NPI implemented. Our results underline that HFD
indicators of economic activity can support governments and
international organisations in economic recovery efforts and
channelling funds to the hardest hit economies and sectors.
These studies and researches provide us more hope and energy to carry
out and present more such studies to the world to make a positive
change in the lives of those expecting nothing from us in return.
Hence we have presented many literature reviews and case studies in

the coming part of the paper along with key-findings on the same.
CSSI INTERNSHIP
PROBLEMS
“The meaning of life is to find your gift. The purpose of life is to give it away.”
- Pablo Picasso
The coronavirus (COVID-19) outbreak is causing widespread concern and

economic hardship for consumers, businesses and communities across the
globe. We’ve prepared some general guidance on COVID-19: What US
business leaders should know, covering the key areas of crisis management,
supply chain, workforce, tax and trade, and financial reporting.
Most companies already have business continuity plans, but those may not
fully address the fast-moving and unknown variables of an outbreak like
COVID-19. Typical contingency plans are intended to ensure operational
effectiveness following events like natural disasters, cyber incidents and power
outages, among others. They don’t generally take into account the widespread
quarantines, extended school closures and added travel restrictions that may
occur in the case of a global health emergency.
The crisis raises a number of unique challenges. In PwC’s inaugural COVID-19

CFO Pulse Survey, finance leaders in the United States and Mexico shared
their top concerns.
 Business continuity planning does not account for the

uncertainty of an evolving pandemic.
 . Raft of industry event cancellations mean fewer

business development opportunities.
CSSI INTERNSHIP
 Vastly diminished business travel results in fewer

client interactions.
 Staffing concerns ramp up for full-time employees, as

well as gig workers, such as drivers, delivery workers
and retail staff, who often work as contractors.
 A slowdown in recruiting resulting from the crisis

could affect a future pipeline of skilled workers.
 Production slows as a result of global supply chain

disruption.
 Cash-flow challenges will test undercapitalized

companies and may require alternative sourcing
and/or the need to subsidize during the crisis to
confirm readiness in its aftermath.
 As companies seek business solutions to address

remote work, social distancing and the need for in-
store alternatives, the demand for developer and
engineering talent is likely to increase. Retaining top
talent will be essential.
 Expect relatively high impact on the smartphone

industry because of its labor-intensive supply chain.
Smartphone production is projected to decline by 12%
YoY in 1Q20; server revenue is projected to decline by
16% YoY in 1Q20.
 Disinformation proliferates on digital platforms.
 Sharing economy inventory takes a hit.

CSSI INTERNSHIP
 Some component manufacturers rely on one or

perhaps two main suppliers.
 Additional containment zones around the world trigger

more shipping and delivery bottlenecks.
 Operational, workforce and supply chain disruptions

will trigger financial reporting implications in current
and future reporting periods.
 Public companies will face increasing pressure to

disclose revised guidance related to the COVID-19
impact.
 New state and local tax implications arise for workers

who are now remote as a result of the crisis.
 Tax compliance operations could lag, as newly remote

employees lack timely access to information.
 In the short term, changes to income statements —

such as short-term losses — will affect forecasts.
 Supply chain reconfiguration triggers tax implications.
 Sudden or prolonged economic downturn will lead to

companies considering significant budget cuts that
eliminate discretionary spending.

CSSI INTERNSHIP
 Remote work, online education and social distancing

will create demand for products and services delivered
by the tech industry.
 The crisis underscores the need for flexible, resilient

business models, including increased focus on cash-
flow forecasting and impacts on supply-chain and
commercial-channel partners.
 Company valuations may become more attractive for

acquisitions by cash-rich companies that have been
sitting on the sidelines, while keeping targets in mind.
 Some tech sector companies rely on overseas

consumption, which has slowed since the outbreak.
 Customers are delaying purchases because the

pandemic has exacerbated an already uncertain global
economy.
 Technology support may struggle to keep up with

increased customer needs on applications.
LITERATURE REVIEW

CSSI INTERNSHIP
The effects of government interventions during COVID-19
Zaremba et al. [22] examined the impact of government interventions on

stock market liquidity in 49 countries during January-April 2020, and
demonstrated that the effect of government interventions is limited in scale
and scope. Specifically, they reported that the closures of workplaces and
schools reduced liquidity levels in emerging markets, while COVID-19
information campaigns promoted trading activity. In a subsequent study,
Zaremba et al. [26] explored the relationship between government policy
responses to the COVID-19 pandemic and stock market volatility. They
gathered data about seven non-pharmaceutical interventions from 67
countries and concluded that information campaigns and the cancellation of
public events were the major accelerators of market volatility.
Kizys et al. [18] used 72 stock market indices from both developed and
emerging economies and tested whether government policy responses to the
COVID-19 pandemic could mitigate investors’ herding behavior. Overall, their
results point to the herding phenomenon in international capital markets, but
policy responses reduced such behavior. Ozili and Arun [27] tested the impact
of government measures during the COVID-19 epidemic on the performance
of leading market indices on four continents: UK, US, Japan and South Africa.
They revealed that the increasing number of lockdown days, monetary policy
decisions and international travel restrictions severely affected the level of
general economic activity and the closing, opening, lowest and highest stock
prices of major stock market indices. In contrast, the restrictions imposed on
internal movement and increased fiscal policy spending had a positive impact
on the level of economic activity.
More recently, Huang et al. [28] tested the effects of COVID-19 government
policies on the hospitality labor market in the U.S. They found that closure

CSSI INTERNSHIP
policies were associated with a 20% - 30% reduction in non-salaried workers

in the hospitality industry. Furthermore, the number of daily confirmed cases
adversely affected the hospitality sector’s labor market.
Previous studies such as the work of Adda [16] explored the unintended
consequences of economic activity on the spread of infections and assessed
the efficiency of measures that limit interpersonal contacts in France. They
found that policies reducing interpersonal contacts such as closing schools and
public transportation significantly reduced the spread of disease, although
they were not cost-effective. Pennathur et al. [20] explored the impact of the
U.S. government interventions in response to the subprime financial crisis on
the stockholder returns of banks, savings and loans firms, insurance
companies, and REITs. They found that interventions reduced the wealth and
increased the risks of financial institutions. Ding et al. [11] used an event study
approach to examine the Chinese stock market’s response to the lockdown
restrictions imposed on Hubei province in light of COVID-19. In general, this
response was negative. Furthermore, firms that had a great deal of exposure
to Hubei earned significantly lower returns following Hubei’s lockdown
measures.
Chen et al. [17] examined the effect of the SARS epidemic on the stock prices
of seven Taiwanese hotel stocks using an event-study approach. They
reported that these firms suffered from steep declines in their earnings and
stock prices during the SARS outbreak. Ru et al. [14] explored the cumulative
abnormal returns during the COVID-19 epidemic for two groups of stock
markets: countries that had experience with SARS, and countries that did not.
They documented a stronger negative response in the markets in the
experienced countries.
Using daily data about confirmed cases and deaths from the corona virus and
stock market returns from 64 countries, Ashraf [10] found that stock markets
responded negatively to the growth in confirmed COVID-19 cases.
CSSI INTERNSHIP
Furthermore, there was a weak relationship with the number of deaths. Al-
Awadhi et al. [9] explored companies included in the Hang Seng Index and
Shanghai Stock Exchange Composite Index during the COVID-19 pandemic,
and established a significant negative relationship between both the daily
growth in total confirmed cases and the daily growth in total deaths caused by
COVID-19. Recently, Goodell et al. [13] investigated the abnormal returns of
49 U.S. industry portfolios around COVID-19 news announcements. They
documented that on February 26, 2020, when the first domestic case was
confirmed in California, 15 industries reacted negatively to this news. The
industries most sensitive to the news around February 26, 2020 were utilities,
services and restaurants, hotels, and motels. Gerding et al. [12] examined
stock market reactions to the COVID-19 outbreak around the world. They
found that the market response was more aggressive in countries with a
higher debt to GDP ratio. Finally, Ding et al. [29] evaluated the degree to
which pre-crisis corporate conditions affected stock price behavior with respect
to the COVID-19 epidemic. They reported that stock fluctuations were more
moderate in firms that engaged in more CSR activities, and had more cash,
less debt, and larger profits. They also indicated that stock prices were less
exposed to the negative of COVID-19 if they had global supply chains and
customer locations, and less entrenched executives. To summarize, we will add
to the standing literature by investigating the impact of various U.S.
government intervention measures on the tourism industry.
COVID-19’s impact on the hospitality industry
The COVID-19 pandemic had an unprecedented negative impact on the

hospitality industry. According to a report published by the American Hotel
and Lodging Association
(https://www.ahla.com/sites/default/files/recessiondepression_0.pdf), the
expected US hotels losses are nearly $83.7 ($51.2) billion in room revenue in
2020 (2021), compared with 2019, while job losses in 2020 (2021) are projected
to be nearly 630,000 (546,000). In addition, about half of hotel markets,
representing 72% of hotel rooms in the US, are still in a recession or
CSSI INTERNSHIP
depression. These numbers indicate that most of the hotel industry has a long
road to recovery, especially when considering that an occupancy rate of 35%
or lower makes it impossible for many hotels to stay open. In Fact, individual
hotels and major operators are projecting occupancies below 20%
(https://hoteltechreport.com/news/tourism-industry-statistics#hotels).
Similarly, the general state of the travel and tourism industry is also under a
great threat. According to the Economic Impact Report by the World Travel
and Tourism Council [30], prior to the pandemic, the travel and tourism
sectors, both directly and indirectly, accounted for 1 in 4 of all new jobs created
around the world, 10.6% of all jobs (334 million), and 10.4% of global GDP
(US$9.2 trillion). In 2020, 62 million jobs were lost, representing a drop of
18.5% (62/334). The threat of job losses is continuing as many jobs are
currently supported by government retention schemes and reduced hours,
which without a full recovery in this sector, could be lost.
A careful mapping of the literature shows that several papers have reported
supporting evidence for COVID-19’s adverse effect on the performance of the
hospitality sector. Hao et al. [31] reviewed the overall impact of the pandemic
on China’s hospitality industry—the country where the health crisis began.
The industry witnessed a sharp decline in hotel occupancy rates and a loss of
over US$9 billion in revenue. About 74% of the hotels in China were closed in
January and February 2020 for an average period of 27 days. Furthermore,
from January 14 to 28, the occupancy of the hotels dropped from around 70%
to 8% and remained under 10% in the following 28 days. As a result, the hotel
and tourism industry reduced their number of employees, leading to a
significant drop in cash flow and revenue. Zheng et al. [32] studied the
phenomenon of “travel fear” in China. They reported that perceptions about
the severity of the threat and the susceptibility to it can cause “travel fear,”
which leads to protective behaviors with regard to travel decisions.
Furthermore, “travel fear” can evoke different strategies that increase people’s
psychological resilience and adoption of cautious travel behaviors. Villace-
Molinero et al. [33] explored perceptions about travel risks during the
CSSI INTERNSHIP
pandemic and proposed measures to improve traveler confidence based on

the issue-attention cycle. Based on a survey conducted in 46 countries and a
qualitative study in which 28 international hospitality experts were interviewed,
the authors concluded that in a pandemic scenario, confidence in
communications from the local government about personal safety and
security are the main factors people consider when making travel decisions.
Lee et al. [34] tested the impact of COVID-19 on hospitality stock returns in
China. They argue that the increasing uncertainty about the COVID-19
outbreak has made the Chinese stock market more turbulent and less
predictable. Using a structural vector auto regression (SVAR) framework, they
examined the link between the COVID-19 outbreak, macroeconomic
fluctuations and hospitality stock returns in China. Their results hint that
macroeconomic fluctuations and hospitality stock returns are significantly
affected by shocks from the COVID-19 outbreak. Crespí-Cladera et al. [35]
used a stress methodology to estimate the potential performance vulnerability
for Spanish hospitality firms. They demonstrated that almost 25% of their
sample firms are exposed to financial distress when operational income
decreases 60%. They also found that the majority of such firms are generally
small ones, which would also suffer from solvency problems. When hospitality
firms’ revenues drop 80%, the predictions show that 32% of firms would be in
financial distress. Rodríguez-Antón and Alonso-Almeida [36] reported that the
performance of the hospitality industry in Spain has been severely damaged
as a result of COVID-19. More specifically, they noted that in the first seven
months in 2020, the total hotel overnight stays in Spain declined from 184.7
million in 2019 to nearly 46.4 million. In addition, the pandemic reduced the
number of new hotel openings (−22.02%) and the number of employees hired
(−30.94%) in March 2020. Finally, a recent study of Clark et al. [37]
documented the negative impact of COVID-19 on the stock performance of
hospitality firms. They estimated negative mean cumulative abnormal returns
of −17.54% for 54 publicly traded hospitality firms from 23 different countries.
Restricting their sample to the US or Japan yielded negative cumulative
abnormal returns of −29.67% and −10.68%, respectively.

CSSI INTERNSHIP
Other studies have examined the impact of previous pandemics, such as the
severe acute respiratory syndrome (SARS), on the performance of the
hospitality industry. Chien and Law [38] showed that the outbreak of SARS in
March 2003 had a strong negative impact on the hotel business in Hong
Kong. The occupancy rates of many hotels in Hong Kong fell to 10% or less in
March and April 2003, which normally is the peak season. Similarly,
Hendersom and Ng [39] reported statistics from the Singapore Tourism Board
confirming the severity of the impact of SARS on the hospitality sector there.
According to the report, the average hotel occupancy rate for the second
quarter of 2003 was 21%, compared with 74.5% for the previous year, and
average room rates dropped by 18.8%. In addition to this report, they also
surveyed hotels in Singapore to estimate the economic loss resulting from
SARS. They noted that in their own surveyed hotels the average occupancy
rates were also relatively low, in the range of 27.7% to 42.3%.
Kim et al. [40] tested the effect of SARS on the Korean hotel industry. They
examined six Korean hotels and reported that the occupancy rate dropped
nearly 14% from February to July 2003. They argued that the reason seemed
to be that inbound tourists saw Korea as an unsafe tourism destination within
the territory of the SARS-affected Asian Pacific zone. Revenue per available
room (RevPAR) during the three months from April to June was 215,849 won
(US$180) in 2002, whereas it was 115,676 won (US$96) in 2003, a 100,173 won
(US$83) difference. Finally, there was a 16% drop in profit margins from April
through June in 2003 compared to the same period in 2002. The average rate
per room also declined by 19% as hotels attempted to cope with the sharp
decline in demand. Tew et al. [41] used a questionnaire designed to
investigate, among other points, the impact of SARS on hotel performance in
Canada. Respondents were asked to assess the impact that the SARS crisis
had on their hotel’s performance. Over 82% of respondents reported that
SARS had an extremely negative or very negative impact on their hotel’s
performance. In addition, Tew et al. (2008) [41] also reported that the Niagara
Falls region experienced a loss of over 122,000 room nights in the second

CSSI INTERNSHIP
quarter of 2003. This loss translated into a loss of $19 million in room revenue.
Finally, Chen et al. [17] examined the effect of the SARS epidemic on
Taiwanese hotel stock price movements using an event-study approach. They
showed that for seven publicly traded hotel companies there were steep
declines in earnings and stock prices during the SARS outbreak period. More
specifically, they reported that in April 2003 hotel companies experienced
drops in earnings in the range of −49.81% to −11.14%. They also showed that
these drops worsened significantly when extending the period examined for
two months (April–June, 2003), with reductions varying from −76.89% to
−20.00%. Finally, they calculated the cumulative abnormal returns of stocks in
this sector during 10 and 20-day windows from the day of the SARS outbreak.
The negative returns they found were also robust using different types of
models to estimate the abnormal returns.
Importantly, COVID-19 has not only directly affected the hospitality industry
performance, but also created collateral damage that might indirectly harm it.
The literature suggests several possible additional factors behind the poor
performance of the hospitality industry that might delay its future recovery.
These effects are evident in the labor force (Jung et al. [42]), its mental health
(Yan et al. [43]), and the willingness to travel and the spreading of fake news
(Alvarez-Risco et al. [44]).
To summarize, these studies show that in addition to the negative effect that
government interventions usually have on financial markets, COVID-19 also
had various detrimental effects on the hospitality industry. Therefore,
combining these two pieces of evidence, we might expect that the impact of
government interventions on the hospitality industry would also be negative.
COVID 19 and food industry

CSSI INTERNSHIP
The COVID-19 pandemic has hit hard on the world economy and global
health. Where most businesses are completely closed following governments
restrictions, the food sector across the supply chain must remain operational
in order to feed the nations. In such a challenging time, keeping the workers
healthy and safe is critical while maintaining a high level of food safety and
consumer confidence. Against a backdrop of heightened uncertainty, up-to-
date and reliable information is more important than ever, both for regulators
and this sector. This literature review aims at assembling all current knowledge
about COVID-19 and its impact on the food industry. It is an exhaustive
compilation of relevant public information and guidance published by the
World Health Organization (WHO), and collected from 11 governmental and
10 non-governmental sources as well as 25 peer-reviewed articles published in
scientific journals since the beginning of the crisis till June 5th, 2020. This paper
could be of assistance to educators, researchers, and policy makers. It could
also serve as an assessment tool to ensure business continuity and to
determine the level of food industry readiness providing reassurance to all
stakeholders during these unprecedented times.
TOURISM Industry (Example of Bangladesh)
The study aim is to measure the effect of the COVID-19 pandemic on the
tourism industry in Bangladesh. This review utilized journals, historical records,
newspaper articles, World Health Organization statistics, governmental data,
and website materials on COVID-19 incidences in tourism. Secondary research
was adopted in which secondary data were collected through a
comprehensive literature review. The COVID-19 outbreak has significantly
affected global travel and tourism. Bangladesh has also experienced an
adverse impact on inbound and outbound tourism. International and
domestic tourists have cancelled bookings in Bangladesh, and outbound
tourism activities have also been banned. Airlines have cancelled flights, while
hotels are almost completely vacant, and as a result, supporting tourism
agencies are facing huge economic losses and employment cuts in
Bangladesh. The amplification of COVD-19 is predicted to cause a long-term
CSSI INTERNSHIP
adverse impact on tourism in Bangladesh. The government of Bangladesh has

declared an incentive package for early economic recovery that is needed for
businesses to survive the pandemic. This review provides a theoretical
cognitive model and literature on tourism for a better understanding of the
COVID-19 pandemic and may also guide future studies in addressing
challenges for the tourism industry.
COVID-19: hotel industry response to the pandemic evolution
The hotel industry is one of the most negatively impacted economic sectors by
the COVID-19. Its recovery relies on the capacity to control the pandemic and
to the macroeconomic efficiency of the policies undertaken by public
institutions to enhance general economic recovery. In this context, it is
essential for hotel industry stakeholders to assess the economic impact directly
attributable to the COVID-19 pandemic’s evolution, along with the effect that
economic policies may have in supporting the industry. Accordingly, this paper
estimates how the 20 world-largest and publicly listed hotel companies’ stock
market returns reacted to the pandemic evolution and to the different public
sector economic measures across the different countries they operate using
regression techniques. Specifically, the industry response is examined during
the period ranging from February 24 to April 24, 2020. The main results show,
on the one hand, that the hotel industry has been negatively affected by the
COVID-19 evolution. On the other hand, hotel stock prices are positively
correlated to economic policies with direct impact in public budget, whereas
measures with non-direct impact, such as liquidity provisions or financial
assistance, seem not to support the industry.

CSSI INTERNSHIP
METHODOLOGY
Sample construction and data sources
Our sample consists of the daily log returns of stock portfolios consisting of
firms operating in the hospitality industry in the following COMPUSTAT SIC
codes: Retail‒eating places (5800‒5819), Restaurants, hotels, motels
(5820‒5829), Eating and drinking places (5890‒5899), Hotels, other lodging
places (7000‒7000), Hotels and motels (7010‒7019), Membership hotels and
lodging (7040‒7049) and Services–linen (7213‒7213). We refer to these related
industries collectively as the hospitality industry.
We use market prices as a proxy for the overall state of the hospitality industry
as well as for the other related sectors. This approach might have limitations,
albeit temporary ones, which stem from behavioral biases. Nevertheless, using
market prices is still a prevalent method that reflects the present value and
state of securities. Additionally, we retrieved data for the log returns of stocks
in nine other related industries (Food Products, Candy & Soda, Beer & Liquor,
Entertainment, Consumer Goods, Apparel, Personal Services, Transportation
and Retail). All firms in each portfolio are traded on the NYSE, AMEX, and
NASDAQ exchanges. The data are publicly available on Kenneth French’s
website and cover the period of December 31, 2018 to April 30, 2020. They
include 336 daily returns for each industry portfolio and a total sample of
3,360 daily observations
(http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html).
We also retrieved data from Kenneth R. French’s data library about the
performance of a market portfolio (MARKET). According to French’s definition,
the market portfolio consists of the value-weighted returns of all CRSP firms
incorporated in the US and listed on the NYSE, AMEX, or NASDAQ (See also
[45] for a complete description).

CSSI INTERNSHIP
Table 1 as well as Fig 1 present information about the cumulative returns of

the hospitality and other related industries for January 2020 to April 2020,
compared to the general market’s performance. As can be seen, the overall
negative performance is not limited to the hospitality industry. In fact, several
other industries are associated with excess negative returns compared with the
hospitality industry. Note too that the worst month for all of these industries
was March 2020, when most of the interventions occurred. During this month
negative returns abounded. Indeed, the hospitality industry lost about 45% of
its cumulative market value. The recovery in the market value of the various
sectors, including the hospitality industry, took place in April 2020. However,
nearly all industries ended the period with a substantial decrease in their
market value.
Fig 1. Comparison of the cumulative returns of the S&P 500, the hospitality
industry and its related industries indexes
A. The figure depicts the cumulative returns of the S&P 500, the hospitality
industry and the indices of numerous related industries since the outbreak of

CSSI INTERNSHIP
COVID-19 in January 2020. “c,” “e” and “h” denote closures, economic and
health measures, respectively.
Table 1. The performance of U.S. hospitality stocks and those in closely related
industries during COVID-19.
Our empirical discussion also utilizes Baker et al.’s measure of uncertainty due
to infectious diseases [46]. The data come from their Economic Policy
Uncertainty website and are available since 1985
(http://policyuncertainty.com/infectious_EMV.html). In designing this index,
Baker and colleagues created an index based on the frequency with which
various terms appeared daily in approximately 3,000 US newspapers. They
classified these articles into three categories: E: economic, economy, financial;
M: stock market, equity, equities, Standard and Poors; and V: volatility,
volatile, uncertain, uncertainty, risk, and risky. Finally, these articles must also
mention one or more terms related to epidemic, pandemic, virus, flu, disease,
coronavirus, MERS, SARS, Ebola, H5N1, or H1N1. The resulting counts were
scaled by the count of all articles on the same day. Fig 2A and 2B plot the
evolution of epidemic-based uncertainty. As can be seen, uncertainty
skyrocketed upwards multiple times above the average. The maximum value
reached was 112.93, recorded on March 15, 2020.

CSSI INTERNSHIP
Fig 2. Evolution of the pandemic-driven uncertainty and market indices.
(A) The dotted line is a one-week moving average of the index. The figure
indicates that starting from the last week of February 2020, pandemic-driven
uncertainty skyrocketed to record values. The figure includes 7-day-a-week
observations. (B) The solid bold red line is Baker et al.’s daily index of
uncertainty due to infectious diseases [46]. This uncertainty measure considers
the frequency of U.S. newspaper articles that include terms related to
economy, risk, financial market, uncertainty and epidemic. The uncertainty
index observations correspond with the trading days on the stock exchange.
The correlation between this form of uncertainty and variations in returns is
0.46 (t-stat = 4.66). Overall, the message of the figure is that high levels of
uncertainty do not bode well for a quick recovery in the hospitality sector.
Fig 2A provides a combined snapshot of the uncertainty due to infectious

diseases and the performance of the hospitality portfolio, NASDAQ and
S&P500. The overall picture illustrates a clear inverse relationship. A high level
of uncertainty is accompanied by a decrease in the hospitality returns (as well
those of the market portfolios), and vice versa.
Event study
Event study methodology explores the response to a specific event by

assessing whether it creates abnormal stock returns that can be attributed to
new information released. Therefore, in using this method, our first step was
determining the event of interest and defining the length of the event’s

CSSI INTERNSHIP
window. To do so, we collected the dates of the government responses to

COVID-19 from Hale et al.’s database [1] (See the Oxford COVID-19
Government Response Tracker on https://covidtracker.bsg.ox.ac.uk/). This
database is constructed from publicly available sources such as news articles
and government press releases and briefings. We also identified March 19,
2020 as another significant date because it marked the day when President
Trump signed a $100 billion economic aid package.
Table 2 presents the list of U.S. government interventions with a definition for
each intervention variable. The responses appear chronologically to illustrate
how the government’s actions evolved over the full period of COVID-19’s
spread.
Table 2. Description of U.S. interventions.
Next, we defined the length of the event window in which we examined the
behavior of the equity prices of stocks in the hospitality sector and those in

CSSI INTERNSHIP
related industries. In fact, there is no golden number for the length of the
event window. On one hand, a longer window relying on a large number of
daily returns may reveal more information. On the other hand, other events
occurring during a long-time window might contaminate the results. Given
the proximity of events, we focused on a relatively narrow timeframe to
minimize the possibility of confounding events. We adopted this approach to
isolate the impact of each intervention, and because the COVID-19 period was
followed by many events apart from the interventions. In addition, using a
long timeframe might increase the chances of contemporaneous and inter-
temporal residual correlations that could result in underestimates of the
standard errors [47]. Brown and Warner [48, 49], as well as McWilliams and
Siegel [50] argued that a long event window also reduces the power of the test
statistics and leads to false interpretations. Therefore, we chose an event study
that spans three days, that is, from t-1 to t+1 days, which should cover the
impact of government interventions on equity indices.
The center of each event study (t0) is the announcement day (henceforth, day
zero). Using Hale et al.’s [1] database, we defined day zero as the first day on
which the intervention was announced to the public. If the announcement was
made on a day when the exchange was closed, we defined day zero to be the
first day when the exchange was open again. For instance, if the intervention
was publicly announced on Saturday or Sunday, day zero would be the
following Monday.
The subsections provide a detailed explanation of how we measured the

returns, expected returns and abnormal returns as well as additional
information concerning government interventions.
Abnormal returns (AR)
To estimate abnormal returns, we followed several studies that use the event
study methodology in the hospitality and other related industries (e.g., [3, 17,

CSSI INTERNSHIP
51, 52]). We extracted the residual returns from the well-known Capital Asset
Pricing Model (CAPM, by Sharpe, [53]), which appears in Eq (1):
Rp,t in Eq (1) is the rate of return of stocks in industry portfolio i on day t, and
Rmt is the market portfolio return, including all NYSE, AMEX, and NASDAQ
firms on day t. The parameters and are the constant and systematic risk
estimated parameters of stocks in industry portfolio i, respectively, and
εCAPM,t is the error term.
The term in parentheses on the right-hand side of Eq (1) is the expected

normal return. The error term is the industry-specific component or the
unexpected return, which can be attributed to the new information released
such as the intervention. We explored each point in time separately from the
market performance.
We estimated the coefficients’ parameters in Eq (1) using a pre-event

estimation period (December 31, 2018-December 30, 2019) consisting of 252
trading days before the outbreak of COVID-19, as on December 31, 2019, the
WHO was informed of cases of pneumonia of an unknown cause in Wuhan
City, China. Finally, we aggregated the abnormal returns (CAR) and computed
the t-statistics, following Brown and Warner [49].
Causality tests
The second step of our methodology attempts to link uncertainty as a

potential driver of the variations in the returns of the hospitality stocks.
Therefore, we also utilized the Granger causality test to examine the ability of
the uncertainty due to infectious diseases to explain the variations in the
returns of the hospitality sector in the COVID-19 period. Technically speaking,

CSSI INTERNSHIP
this procedure leads to a statistical hypothesis test for determining whether a

given time series is useful for forecasting another one. Hence, this procedure,
by and large, is closely related to the terms “cause” and “effect.” We used the
Granger causality procedure to examine whether time series x “Granger-
causes” time series y [54]. If this relationship holds true, then lagged values of
x should contain information that helps predict y. This relationship reads as
follows.
where k denotes the length of the lag, and ui (i = 1,2) is the disturbance term.
This model allows us to test whether lagged values of one variable, say X,
helps explain current values of another one, say Y. Formally, we can infer such
an outcome if the hypothesis that α11 = α12 = … = α1k = 0 is rejected. In
other words, if we do not reject this hypothesis, then variable X does not
Granger-cause Y.
OLS and regression analysis
Lastly, after testing the potential relationship between hospitality stock returns
and uncertainty, we explore the uncertainty levels around the interventions
themselves. To do so, we employ OLS estimations, which link government
interventions with uncertainty. Such examination will allow us to reveal
whether government interventions induce uncertainty, fear and anxiety, which
will be then translated to hospitality stock returns performance. To obtain
heteroscedasticity and autocorrelation consistent covariance matrix estimates,
we employed Newey and West’s [55, 56] estimation method.

CSSI INTERNSHIP
RESULTS
Model validation
We find a good fit between the values predicted by our algorithm and the
reported trade flows on a port-level (correlation coefficient between 0.52–0.96)
and a country-level (correlation coefficient between 0.79–0.98), with a general
overestimation for smaller ports, and ports and countries with large trade
imbalances (e.g. small islands). For the external validation data, we find
correlation coefficients of 0.84–0.86 for the aggregated trade data and 0.73–
0.78 for the sector-specific trade data (on a country level). Again, smaller trade
flows are harder to predict. The accuracy of the method is also found to be
dependent on the coverage of information in the AIS data (some attributes are
manually put in), especially information on the vessel draft, which is less
frequently reported in developing countries.
Port-level trade flows
In the first eight months of 2020, the number of port calls across all ports
reduced by 4.4% compared to the same months in 2019. Fig 1A shows the
average change in total trade (imports + exports) in terms of volume (in
CSSI INTERNSHIP
million tonnes, MT) over the months January-August. The vast majority of
ports have experienced a decline in total trade, although a number of ports in
Brazil, the Gulf of Mexico region, the Middle-East, Australia, and parts of
South-Korea and the Philippines have seen an increase in trade in 2020
relative to 2019. The top 20 port with the largest changes in volume in terms
of total trade, imports and exports are included in Table 1. The ports with the
largest absolute changes in volume are the ports of Ningbo (China, -68.5 MT),
Rotterdam (Netherlands, -43.2 MT), Shanghai (China, -32.5 MT), Wuhan
(China, -21.6 MT) and Tubarao (Brazil, -20.7 MT). The largest changes in
imports are found for the ports of Ningbo (China, -43.5 MT), Rotterdam
(Netherlands, -40.1 MT), Shanghai (-22.4 MT), Zhoushan (China, -22.4 MT)
and Amsterdam (Netherlands, -12.2 MT). These ports, and the other ports in
the list, function as major gateway ports for a country to import final products
(New York-New Jersey, Rotterdam), or are essential for specific supply-chains,
such as textiles and electronics manufacturing (Shanghai, Ningbo, Zhoushan),
steel and paper manufacturing (Ghent, Amsterdam, Rizhou), car
manufacturing (Yokohama) and raw materials (coal imports for
Krishnapatnam). The largest export changes are found for the ports of Ningbo
(China, -25.0 MT), Tubarao (Brazil, -17.1 MT), Novorossiysk (Russia, -11.5 MT),
Wuhan (China, -10.8 MT), Beaumont (USA, -10.6 MT) and Dampier (Australia,
-10.2 MT). These ports, and the other top 20 ports with the largest export
losses, are all important export ports for global supply-chains, including the
exports of iron ore (Dampier, Tubarao), coal (Haypoint), oil and refined
petroleum products (Puerto Bolivar, Fujairah, Beaumont and Novorossiysk)
and manufacturing products (Ningbo, Wuhan and Shanghai).

CSSI INTERNSHIP
Fig 1. Port-level trade losses over time.
The geographical location and magnitude of trade losses for Jan-Aug 2020
compared to 2019, including the average over the eight months and the losses
per month. Green = positive change, red = negative change. The subplots
show the cumulative change over latitude and longitude for imports (dark
blue) and exports (dark red). This figure was generated using the ‘Geopandas’
package (https://geopandas.org) and Python Programming Language
(version 3.7). The underlying basemap is derived from ‘Natural Earth’ global
vector data (https://www.naturalearthdata.com).

CSSI INTERNSHIP
Table 1. Largest absolute trade losses on a port-level.
Fig 1B–1M show the changes in total trade per month for all ports and the
cumulative changes in trade over latitude and longitude. In January, losses are
predominantly pronounced in China that extended their Lunar New Year
holiday [28], among other measures, resulting in output losses to the Chinese
industry. This resulted in a direct demand shock, in particular for the export of
raw materials (e.g. iron ore, copper, nickel) that China predominantly imports
[29]. This can be observed from the large negative losses found in the large
export ports of Brazil. In February, ports in Europe experienced their first drop
in imports (blue line top plot), while export losses are still concentrated in Asia.
This import drop in Europe coincided with the transit time from China to
Europe, which is around three weeks. The export drop is, alongside Brazil, also
visible in the main iron ore exporting ports in Australia (Port Hedland and Port
Walcott) and South Africa (Port of Richards Bay) that both supply iron ore to
the Chinese industry. In March, exports temporally recovered, while imports
dropped in many parts of the world, mainly to due to initiation of lockdowns in
economies outside Asia. In particular, India, Malaysia, Singapore, USA West
Coast and Mexico saw a large drop in trade in March. In April, trade partly

CSSI INTERNSHIP
recovered in the Northern Hemisphere, while in May the second drop in global
trade hits the global economy, as a widespread reduction in demand and
supply ripple through the economy. Losses are again pronounced in China
and Western Europe, leading to the lowest total import and exports changes
on a global scale. In June, July and August, a partial recovery is visible for
some ports, while the Middle-East, Eastern Australia, Japan and Western
Europe (in particular Belgium and the Netherlands) show large losses. For the
Middle-Eastern countries, the collapse of the oil market has contributed to the
large trade losses (which are predominantly exports losses). In August, signs of
recovery (especially imports) are visible for the Philippines, India, South Africa,
Brazil and Argentina, and parts of the Mediterranean, while other countries
are still experiencing large losses.
Geographical disparity
Fig 2A and 2B show the country-aggregated relative changes in imports and

exports, with the top 20 largest negative (relative) changes included in Table 2
and largest negative absolute changes in S1 Table. The top 20 largest total
trade losses range between 17–36%. The largest percentage change in imports
are associated with small economies such as Turks and Caicos Islands, the
Caribbean Netherlands, Bahrain, Anguilla, Federated States of Micronesia and
Madagascar (all between 28–37% reduction). Most of the countries with the
largest import losses are Small Island Developing States, which are
characterised by having large import-dependencies due to their small
domestic economies, being reliant on maritime trade flows for trade, and
importing large amount of goods to support the tourism sector that
constitutes a large share of the country’s GDP [30]. With the tourist industry
collapsing due to the COVID-19 outbreak [31], the imports are expected to
drop significantly, explaining the widespread reductions observed. Other
countries, like a number of countries in Africa, Myanmar, Oman, Philippines,
the Baltic States and Sweden have increased their imports, likely due to the
increased need for food and medical supplies in developing nations or
increased household consumption in some developed countries. In terms of
exports, the largest relative losses are found for Libya, New Caledonia,

CSSI INTERNSHIP
Guinea-Bissau, Northern Mariana Islands, Cape Verde and Sudan (all

between 50–78% reduction). These countries include many raw materials
exporting countries that have suffered from the demand shock across the
world, in particular through trade dependencies with Europe, China and the
United States [32]. Moreover, many low income countries had to pro-actively
lockdown economies to protect their health care system, or are engaged in
economic activities that are less able to be done remotely [32, 33]. Some
countries have increased their exports, such as India, Myanmar, Vietnam and
Philippines, potentially because of production shifts of manufacturing goods to
these countries when factory shut down in China [34]. Moreover, exports grew
in Argentina, mainly due to booming exports of food products (e.g. soybeans,
beef) to the United States and China [35], and in Tanzania, which increased its
exports of gold and food (e.g. nuts) and textile products (e.g. cotton) [36].
Fig 2. Country-level relative trade losses.
The relative trade losses for Jan-Aug 2020 compared to 2019 expressed in
percentage change. Grey countries indicate no data available. This figure was
generated using the ‘Geopandas’ package (https://geopandas.org) and
Python Programming Language (version 3.7). The underlying basemap is
derived from ‘Natural Earth’ global vector data
(https://www.naturalearthdata.com).

CSSI INTERNSHIP
Table 2. Largest relative trade losses on a country-level.
Using the World Bank income classification (2019–2020), we test whether high
and upper middle income countries have experienced more severe impacts
than low and lower middle income countries. Without excluding outliers from
the data, we find a significant difference (two-sided t-test with p>0.05)
between both income groups for exports and imports, with high and upper
middle income countries having higher export losses. Hence, although the
high and upper middle income countries have higher mean export losses, the
most extreme export losses and gains are found for low and lower middle
income countries.
Time series of total and sector-specific trade changes
The total trade losses are not uniform across sectors. Fig 3 shows the
estimated total trade losses over time (Fig 3A) together with the trade losses
for the 11-sector classification considered. The total trade losses are found to
be between -7.0% and -9.6% (mean -8.3%), which is equal to around 206–
286 MT in volume losses and up to 225–412 billion USD in trade value

CSSI INTERNSHIP
(uncertainty due to differences in total import and export losses and due to the
volume to value conversion, see S1 Appendix). The time series show (Fig 3A) a
clear initial drop in trade in the first three months, after which trade partly
recovers, followed by a second, more pronounced, drop in trade. In late
August 2020, a sign of economic recovery is not yet visible.
Fig 3. Sector-specific losses over time.
The change in daily global total trade as a fraction of the average daily trade
(over 2019). The dark blue line represent imports, the dark red line represent
exports, whereas the grey line indicate total trade (import + exports). Sector 1:
Agriculture; Sector 2: Fishing; Sector 3: Mining and quarrying; Sector 4: Food
and beverages; Sector 5: Textiles and wearing apparel; Sector 6: Wood and
paper; Sector 7: Petroleum, chemical and non-metallic mineral products;
Sector 8: Metal products; Sector 9: Electrical and machinery; Sector 10:
Transport equipment; Sector 11: Other manufacturing.

CSSI INTERNSHIP
Some supply-chains have been more resilient than others. The most resilient
sectors are found to be Textiles and wearing apparel (-4.1%), Food and
beverages (-5.8%), Other manufacturing (-6.0%) and Wood and paper (-
6.3%). The times series of Textiles and wearing apparel and Other
manufacturing show, however, a large drop in exports in the early stages of
the pandemic, mainly associated with production in China and other Asian
economies (e.g. Bangladesh, Malaysia), followed by a gradual recovery and a
less steep second drop. The Wood and paper and Food and beverages sectors
have been more stable throughout pandemic outbreak, as supply-chains were
not significantly disrupted, and demand for products only gradually declined,
followed by signs of a recovery at the end of August. The largest relative
changes are found for the Fishing sector (-9.5%), Mining and quarrying (-
9.0%), Manufacturing of electronics and machinery (-8.8%), and
Manufacturing of transport equipment (-11.8%). The drop in fishing products
peaked late in the pandemic with a clear recovery in July and August. The
time series of the mining and quarrying sector shows a more complex picture
with a sharp drop in the beginning of the pandemic, as demand for raw
materials decreased in Asia, followed by a steep increase in trade to restock
inventories, after which a total collapse of the market can be observed, mainly
associated with reduced demand for oil. For the two manufacturing sectors,
the large losses are the result of significant supply-chain disruptions that
caused upstream production processes to halt due to a shortage in supplies
[37]. In particular the Transport manufacturing industry, characterised by just-
in-time logistic services and highly specialised production processes,
experienced a gradual disruption throughout the first few months, after which
trade declined more than 20% in May, June and July.
Impact of non-pharmaceutical interventions on export
The results of the panel regression model are included in Table 3. As described
in the methodology, the base model (Model 1 and 2) includes country and
time (day) fixed effects and daily control variables for the number of confirmed
cases as a fraction of the population (Cases), demand reduction in trade
dependent countries (Demand), the potential supply disruptions through

CSSI INTERNSHIP
changes in import that are used for exports (Supply), and potential other
factors that are auto correlated with the change in exports (Export lag).
Table 3. The results of the various regression models.
The effect of the composite index on daily export change is strong, and
statistically significant (p < 0.01), with a 10% increase of the index resulting in
a -0.40% change in exports (Model 1). The influence of NPI on exports is
mixed with some measures showing a negative impact while others showing a
positive impact (Model 2). Negative impacts are found for school closing (C1, -
3.97%, significant at p < 0.01), workplace closure (C2, -2.89%, significant at p
< 0.05), restrictions on public gatherings (C4, -2.38%, significant at p < 0.10),
and closing of public transport (C5, -3.86% significant at p < 0.01).
Surprisingly, a positive effect is found for stay at home requirements (C6,
+3.86%, significant at p < 0.05), restrictions on internal movement (C7,
+2.73%, significant at p < 0.05) and restrictions on international travel (C8,
+3.45%, significant at p<0.01). Additionally, we run a model (Model 3 and 4)
which include only the days where the outbreak become significant in a
country (which we define as having at least 50 confirmed cases). The
coefficient of the composite index is found to be slightly higher (-4.73% relative

CSSI INTERNSHIP
to -4.00%, both significant at p < 0.05). For the individual NPI, the effect of
school closures, restrictions on public gatherings, closures of public transport
and stay at home policies becomes larger, while the effect of workplace
closures, restrictions on internal movement and restrictions on international
travel diminishes becomes not significant. This difference suggest that some
policies particularly affected the economy when implemented pro-actively
(before the health crisis started), while it becomes less important when cases
become more prevalent in a country. For instance, 52 countries implemented
pro-active workplace closures before reaching 50 positive cases.
Next, we test the robustness of the results by changing a number of

assumptions in the model (see S2 Appendix for full details). First, we test
whether the 10-day smoothing of the time series affects the results by
evaluating the results for a 7-day and 3-day smoothing period. The results are
shown in S2 Table 1 in S2 Appendix, and shows that the effect of the
composite index becomes less strong for a 7 day period and becomes not
significant for a 3 day period (although with similar values). For the individual
NPI, the results for the closures of schools and public transport, and
restrictions on internal movement and international travel are robust across
models, while the other NPI become not significant. Hence, less smoothing of
the time series lowers the signal to noise ratio, making it generally harder to
detect the influence of NPI. Second, we vary the lag of the export change (3
day, 5 day and 7 day), with the results included in S2 Table 2 in S2 Appendix.
Across all models, increasing the lag will increase the effect of the composite
index and the individual NPI, since the influence of other endogenous factors
becomes less strong (and more weight is attributed to the NPI). Therefore, the
results presented in Table 3 are considered the most conservative values.
Third, we test whether the inclusion of alternative time fixed effects (day, week
and month) in the model changes the result (see S2 Table 3 in S2 Appendix).
The results do not change much, although the composite index becomes
larger and more significant.

CSSI INTERNSHIP
For the first robustness checks, we test whether implementing the policies in a
lagger manner changes the result. We lag the policies 5 and 10 days and
evaluate whether the estimated coefficients become larger, which would
indicate that the NPI indeed influence the export dynamics in a lagged way
(S2 Table 4 in S2 Appendix). For school closures, stay at home requirements
and restrictions on international travel, the effect becomes larger, suggesting
that the influence of these NPI takes days to materialize. For the second
robustness check, we contrast the coefficient of the NPI when included
altogether or one at a time (S2 Table 5 in S2 Appendix). The negative
coefficients of C1, C2, C4 and C5 are still found when including only these
policies (and significant at p < 0.01), whereas the positive effects of C6 and C7
become small and not significant. The positive effect of C8 is found at p < 0.1.
Thus, the interpretation of the positive effects of C6-C8 should be done with
caution.
DISCUSSION AND CONCLUSION
We present a near-global analysis of maritime trade indicators based on

empirical vessel tracking data, which we use as a high-frequency indicator of
economic activity. We illustrate how the implementation of NPI have resulted
in large trade losses with a strong geographical and sectoral heterogeneity,
with individual NPI affecting the economy in different ways.
Our estimate of a 4.4% reduction in global ports calls for the first eight
months of 2020 is lower than the 8.7% predicted by UNCTAD for the first six
months [38]. The main reason for this difference is associated with the
inclusion of different vessel types. Whereas we include only the main trade-
carrying vessels, the UNCTAD analysis also included passengers vessels (66%
of total port calls), which have seen the largest drop in port calls (-17% for

CSSI INTERNSHIP
passenger vessels). Moreover, the sector-level trends we found are in line with
the sector-level impacts (based observed trade data of China, the European
Union and the United States) for the first quarter (Q1) of 2020 as presented in
the UNCTAD analysis [38], that stated that in particular the automotive
industry (-8%), machinery (-8%), office machinery (-8%) and textiles and
apparel (-11%) are particularly hit. Our analysis, which differs by only including
maritime trade (instead of total trade) and having a global scale (instead of
three regions), found the average losses in Q1 for the textiles and apparel
(Sector 5), electrical equipment and machinery manufacturing (Sector 9),
transport equipment (Sector 10) and other manufacturing (Sector 11) to be
respectively 6.2%, 9.2%, 6.5% and 8.4%. The trade losses we estimate (225–412
billion USD for the first eight months) are considerably lower than reported in
the modelling framework of Lenzen et al. [39], who estimated the trade losses
for the first five months of 2020 to be 536 billion USD. Again, part of this
difference is due to the coverage of countries (they provide a full global
analysis) and modes of transport (all modes compared to maritime only). Still,
input-output based analysis, as done in Lenzen et al. [39], often fail to
consider adaptative behaviour in the global economic system, which can
dampen economic impacts [40]. Our result of a contraction of almost 10% of
maritime trade is also in line with the most recent UNCTAD trade report [41]
that showed that during the first three quarters of 2020, global trade (in value
terms) decreased by 8%, with the largest hit to trade in Q2 of 2020.
The results of the econometric model provide an alternative view to previous

studies that have evaluated the effect of NPI on the spread of the virus [1, 2, 4,
42] and the economy [5, 8]. We find clear evidence of the negative impacts of
NPI on changes in daily exports, with a 10% increase in the overall stringency
value resulting in an approximate 0.40% decrease in daily maritime exports. In
particular, we find evidence that closures of school, workplaces and public
transport had a negative effect on daily exports, whereas stay at home
policies, restrictions on internal movements and international travel controls
have resulted in a positive effect on daily exports. The stark negative effect of
school closures, robust across model specifications, is in line with previous

CSSI INTERNSHIP
model-based estimates that showed that school closures, resulting in a large

forced absenteeism by working parents, have large impacts on the economy.
For instance, a study [43] showed that school closures of 12–13 weeks in the
United Kingdom would result in a 0.2–1% drop in national GDP, whereas
another study [44] showed that a 8-week school closure in the United States
could result in losses of up to 3% of GDP. Looking at the relative effect of
different NPI, our results are in partial agreement with Deb et al. [5], who used
nitrogen emissions as an indicator of industrial output, and found that
workplace closures and closures of public transport had the largest influence
on the drop in emissions, followed by cancellation of events and school
closures. However, direct comparison with these results should be taken with
caution, as the causal mechanisms may differ. For instance, changes in
nitrogen emissions primarily reflect emissions from heavy industry and
transportation, while changes in maritime exports reflect industrial activity
across all sectors. The large drop in emissions from the cancellation of events,
for instance, is most likely associated reduced emissions from transport to and
from events, but might not necessarily affect industrial exports much (as we
find no evidence that this influenced exports). Similarly, school closures, stay at
home requirements and restrictions on internal movements had the highest
effect on changes in mobility across Europe, as shown in Santamaria et al.
[15], which can also be attributed to different causal pathways. We find that
pro-active business closures (before cases were high in a country), had a
negative effect on exports, but its effect becomes insignificant when case rates
are high in a country. This could be related to the fact that many countries (in
particular countries with below-average GDP/capita) had to pro-actively close
workplace to protect their health system. More specifically, 75% of low-income
countries and 62% of lower-middle income countries in our sample had to
implement such pro-active workplace closures, compared to 30% of high-
income countries. This is in agreement with Furceri et al. [23] who found that
countries with lower GDP/capita had higher output losses relative to the
extent of the health crises. The possible causal pathways resulting in positive
effects (compared to countries not imposing these NPI) of stay at home
policies, restrictions on internal movements and bans on international travel
are difficult to establish. One reason could be that these policies helped

CSSI INTERNSHIP
containing the spread of the virus, while causing minimal disruptions to

economic activity, resulting in relative positive effects. Fezzi and Fanghella [9]
also concluded that pursuing a herd immunity strategy did not shield
countries from economic impacts, in line with our results. Moreover, Furceri et
al. [23] find a link between the deaths per capita and reduced industrial
output, showing how implementing targeted policies to reduce the
transmission might protect the economy. Still, the positive effects should be
further scrutinized, as was shown in the second robustness check, before we
can draw a definite conclusion on this.
Overall, all results should be interpreted with caution, as many factors could
potentially influence these causal relationships. For instance, temporal
increases in maritime transport during some periods of the pandemic could be
driven by the large increase in trade of medical supplies (e.g. PPE) and mode
substitution from air to maritime [45], irrespective if policies were imposed
during these periods. Therefore, testing alternative economic indicators, such
as data on mobility, energy consumption and nitrogen emissions, as done in
Deb et al. [5], can help support these findings. Future work can refine our
estimates by adding more economic data when it becomes available,
including extending the analysis to indicators of air, road and rail transport.
Moreover, the empirical estimates derived here can be used to constrain and
validate macro-economic impact models, as used in previous work [6, 39], in
order to improve the quantification of the total losses to industrial output as
the pandemic unfolds.
In short, our analysis of the economic implications of introducing NPI into

society can help evaluate the cost-benefit of the different NPI, which may help
governments construct effective portfolios of policies as many countries enter a
second or third wave of COVID-19 cases [46]. Moreover, we emphasize how
real-time indicators of economic activity, such as maritime trade, can help
monitor the unfolding economic disruptions across spatial scales and support
governments and international organisations in their economic recovery
efforts by allocating funds to the hardest hit economies and sectors.
CSSI INTERNSHIP
RECOMMENDATIONS
 Appoint a central, accountable leader, supported by a cross-functional
team, to manage this continually evolving crisis.
 Create a framework for data analysis and decision-making.
 Run simulation exercises based on realistic scenarios in the short,

medium and long term.
 Seek outside help as needed.
 Determine which critical functions must remain onsite and which can be
remote.
 Communicate clearly, accurately and often about health and safety

considerations.
 Showcase cybersafe platforms that support remote employees. Having

fewer workers in the office makes it safer for those whose jobs require
them to be there.
 Shore up workforce modeling.

CSSI INTERNSHIP
 Rethink benefits for gig workers.
 Activate contingency planning for vendor management.
 Anticipate and plan for supply chain modifications, should the crisis last
longer than a quarter.
 Reset operating model(s) with emphasis on supply chain and

manufacturing footprint.
 Move quickly to counter disinformation as it occurs, and communicate

with employees, customers and business partners.
 Evaluate financial reporting requirements and audit impact.
 Revisit key assumptions in financial projections.
 Communicate current and potential future impacts to shareholders.
 Craft a contingency plan to meet tax compliance obligations on time.
 Improve tech-enabled functionality to confirm timely access to required

information.
 Conduct additional modeling to assess how changes to income

statements will affect forecasts.
 Scan for M&A opportunities to shore up resilience.
 Reevaluate cost structure.
 Prepare for a slowdown by assessing which organizational levers to pull.

CSSI INTERNSHIP
 Shore up enterprise risk-management efforts.
 Reprioritize limited supply to the most profitable regions, segments and

customers.
 Team with technology channel partners to understand where future

demand can be generated in the short term, such as in countries not as
hard hit by the virus.
 Evaluate pricing actions and other countermeasures to bolster current

and future quarterly demands.

CSSI Report

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CSSI Report

Uploaded by

Copyright:

Available Formats

CSSI INTERNSHIP

Impact of COVID 19 on industry

Institute Name : PANDIT DEENDAYAL ENERGY UNIVERSITY

1 | 20BCP049 Aniket Gupta

 The problem topic for the research is “IMPACT OF COVID 19 ON

2 | 20BCP049 Aniket Gupta

“ You only live once, but if you do it right, once is enough.”

 Businesses and organizations face economic and operational

 The emergence and spread of COVID-19, caused by the

repercussions, both in terms of domestic industry output and

Quantifying the costs and benefits of various NPI on the economy

A growing body of literature has used high-frequency data (HFD),

4 | 20BCP049 Aniket Gupta

In this research, we present a high-frequency dataset of maritime

We estimate that, globally, maritime trade reduced by 7–9.6%

Hence we have presented many literature reviews and case studies in

The coronavirus (COVID-19) outbreak is causing widespread concern and

The crisis raises a number of unique challenges. In PwC’s inaugural COVID-19

 Business continuity planning does not account for the

 . Raft of industry event cancellations mean fewer

 Vastly diminished business travel results in fewer

 Staffing concerns ramp up for full-time employees, as

 A slowdown in recruiting resulting from the crisis

 Production slows as a result of global supply chain

 Cash-flow challenges will test undercapitalized

 As companies seek business solutions to address

 Expect relatively high impact on the smartphone

 Disinformation proliferates on digital platforms.

 Sharing economy inventory takes a hit.

7 | 20BCP049 Aniket Gupta

 Some component manufacturers rely on one or

 Additional containment zones around the world trigger

 Operational, workforce and supply chain disruptions

 Public companies will face increasing pressure to

 New state and local tax implications arise for workers

 Tax compliance operations could lag, as newly remote

 In the short term, changes to income statements —

 Supply chain reconfiguration triggers tax implications.

 Sudden or prolonged economic downturn will lead to

8 | 20BCP049 Aniket Gupta

 Remote work, online education and social distancing

 The crisis underscores the need for flexible, resilient

 Company valuations may become more attractive for

 Some tech sector companies rely on overseas

 Customers are delaying purchases because the

 Technology support may struggle to keep up with

9 | 20BCP049 Aniket Gupta

The effects of government interventions during COVID-19

Zaremba et al. [22] examined the impact of government interventions on

10 | 20BCP049 Aniket Gupta

policies were associated with a 20% - 30% reduction in non-salaried workers

COVID-19’s impact on the hospitality industry

The COVID-19 pandemic had an unprecedented negative impact on the

pandemic and proposed measures to improve traveler confidence based on

14 | 20BCP049 Aniket Gupta

15 | 20BCP049 Aniket Gupta

COVID 19 and food industry

16 | 20BCP049 Aniket Gupta

TOURISM Industry (Example of Bangladesh)

adverse impact on tourism in Bangladesh. The government of Bangladesh has

COVID-19: hotel industry response to the pandemic evolution

18 | 20BCP049 Aniket Gupta

Sample construction and data sources