Trade crisis? What trade crisis?

We provide an analysis of the 2008-2009 trade collapse using microdata from a small open economy,Belgium. First, we find that changes in firm-country-product exports and imports occurred mostly atthe intensive margin: the number of firms, the average number of destination and origin markets perfirm, and the average number of products per market changed only very little. Second, econometricanalysis reveals some composition effects in the intensive margin fall along firm, product and countrycharacteristics. The most important factor explaining changes in exports is the destination country'sgrowth rate of GDP. Had growth rates in 20082009 been the same as in 20072008, Belgian exportswould have fallen by about 57 less than what we observe. Trade in consumer durables and capitalgoods fell more severely than trade in other product categories, which explains another 22 of theobserved fall. Financial variables and involvement in global value chains have some explanatorypower on the exports and imports fall respectively, but appear to have affected domestic operations inequal proportion. More generally, exports-to-turnover and imports-to-intermediates ratios at the firmlevel did neither systematically decrease nor reveal strong firm- or sector-specific patterns. Overall,our results point to a demand-side explanation: the fall in trade was mostly driven by the fall ineconomic activity. It is not a trade crisis | just a trade collapse.,