The Effect of Lockdown Policies on International Trade: Evidence from Kenya
This study analyzes how Kenya’s import and export trade was affected by lockdown policies during the COVID-19 outbreak. Analysis is conducted using a weekly series of product-by-country data for the one-year period from July 1, 2019 to June 30, 2020. Analysis using an event study design shows that the introduction of lockdown measures by trading partners led to a modest increase of exports and a comparatively larger decline of imports. The decline in imports was caused by disruption of sea cargo trade with countries that introduced lockdown measures, which more than compensated for a significant rise in air cargo imports. Difference-in-differences results within the event study framework reveal that food exports and imports increased, while the effect of the lockdown on medical goods was less clear-cut. Overall, we find that the strength of lockdown policies had an asymmetric effect between import and export trade.