The Short-Term Effects of COVID-19 on the Manufacturing Industry in Colombia: Unveiling Insights through a Natural and Exogenous Experiment

This study analyzes the economic impact caused by the beginning of the COVID-19 pandemic, characterized by the confinement in the second and third quarters of 2020, on the Colombian manufacturing industry. It implemented a Difference-in-Difference (Dif-in-Dif) set-up model design; in this case, it measures the impacts of the industrial production index on the Colombian manufacturing industry, employment, manufacturing exports, and imports, considering the COVID-19 crisis as a random natural experiment. For this, the Dif-in-Dif methodology was used for time series data and variables to describe the behavior progress of COVID-19 in Colombia. The results show that the COVID-19 pandemic has had a statistically significant impact on the industrial manufacturing production index, the number of employed individuals in the manufacturing sector, and the manufacturing of imports, which signifies a negative impact concerning the number of individuals who tested positive for COVID-19 and the number of deaths and recoveries.