Effect of COVID-19 Stimulus Packages on Nations’ Competitive Advantage

The study examines the country’s competitive advantage variations due to fiscal stimulus allocated for COVID-19 by the G-20 governments. It predicts that G-20 countries that are more likely to attract future investments from global firms will improve their trade share in the post-COVID-19 scenario. The study uses the growth-share matrix and 4E (entrenching, empowering, enterprising, enriching) framework. Findings indicate that Japan, the USA, India, Australia, and Canada have allocated significantly large stimulus as a percentage of gross domestic product (GDP) compared to their world trade share. It is likely to provide them with a competitive advantage in the future. The findings further reveal that the Governments have significantly allocated the stimulus to four sectors, that is, health, social security, industry and construction, and small and medium enterprises (SMEs). In the post-COVID-19 scenario, global firms may seek market entry or expansion strategies in these sectors in the nations mentioned above.