The Global Impact of Brexit Uncertainty

79 Pages Posted: 14 Jan 2020 Last revised: 31 Mar 2021

See all articles by Tarek A. Hassan

Tarek A. Hassan

Boston University; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Stephan Hollander

Tilburg University - Tilburg School of Economics and Management

Ahmed Tahoun

London Business School

Laurence van Lent

Frankfurt School of Finance and Management

Multiple version iconThere are 5 versions of this paper

Date Written: December 2019

Abstract

We propose a text-based method for measuring and analyzing the international propagation of uncertainty shocks at the firm level. We apply this method to estimate the impact of Brexit-related uncertainty and find widespread reverberations on listed firms in 81 countries. International firms most exposed to Brexit uncertainty not only significantly lost market value but also reduced hiring and investments. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expected negative direct effects from Brexit (the first moment). Most prominently, firms expected difficulties from regulatory divergence, reduced labor mobility, and limited trade access.

JEL Classification: D8, E22, E24, E32, E6, F0, G18, G32, G38, H32

Suggested Citation

Hassan, Tarek Alexander and Hollander, Stephan and Tahoun, Ahmed and van Lent, Laurence, The Global Impact of Brexit Uncertainty (December 2019). Available at SSRN: https://ssrn.com/abstract=3518592

Tarek Alexander Hassan (Contact Author)

Boston University ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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Centre for Economic Policy Research (CEPR)

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Stephan Hollander

Tilburg University - Tilburg School of Economics and Management ( email )

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Tilburg, DC Noord-Brabant 5000 LE
Netherlands
+31 13 466 8288 (Phone)
+31 13 466 8001 (Fax)

HOME PAGE: http://www.uvt.nl/people/s.hollander

Ahmed Tahoun

London Business School ( email )

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London, London NW1 4SA
United Kingdom

Laurence Van Lent

Frankfurt School of Finance and Management ( email )

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Frankfurt am Main, 60322
Germany

HOME PAGE: http://www.laurencevanlent.org

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