Regional Economic Impact of COVID-19: The Role of Sectoral Structure and Trade Linkages

The paper provides an ex-post analysis of the determinants within-country regional heterogeneity labour market impact COVID-19. By focussing on first wave pandemic in four largest euro area economies, it finds that propagation economic across regions cannot be explained by spread infections only. Instead, a region’s structure is significant driver observed heterogeneity. Moreover, our results suggest region's trade relations, both within and countries, represent relevant indirect channel through which COVID-19 related disruptions affect activity. In this regard, depicts vulnerabilities arising from potential highly integrated EU supply chains. JEL Classification: R11, F14, J40, R15