Diversification, vertical integration and economic resilience: evidence from intercity truck flows during COVID-19 in China

Abstract

Abstract This article examines economic resilience by combining high-frequency truck flows and the lockdown policy shock during COVID-19 in China. We discover that the truck flows in regions with higher levels of diversification and vertical integration see a smaller decrease in response to the COVID-19 shock. Dynamically, such moderating effects of diversification and vertical integration get smaller with the recovery of interregional economic linkages. Diversification and integration also mitigate the negative impact from nonlocal infection cases. The association between the industrial structure attributes and economic resilience is more prominent in regions with lower centrality in the nationwide intercity truck flow network.