The Global Impact of Brexit Uncertainty
92 Pages Posted: 6 May 2021 Last revised: 18 Jul 2022
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The Global Impact of Brexit Uncertainty
The Global Impact of Brexit Uncertainty
https://doi.org/10.36687/inetwp106
The Global Impact of Brexit Uncertainty
The Global Impact of Brexit Uncertainty
Date Written: July 15, 2022
Abstract
We propose a text-based method for measuring the cross-border propagation of large shocks at the firm level. We apply this method to estimate the expected costs, benefits, and risks of Brexit and find widespread reverberations in listed firms in 81 countries. International (i.e., non-UK) firms most exposed to Brexit uncertainty (the second moment) significantly lost market value and reduced hiring and investments. International firms also overwhelmingly expected negative first-moment impacts from the UK’s decision to leave the EU, particularly related to regulation, asset prices, and labor market impacts of Brexit.
Keywords: Brexit, uncertainty, sentiment, text-as-data, cross-country effects
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