The Global Impact of Brexit Uncertainty

92 Pages Posted: 6 May 2021 Last revised: 18 Jul 2022

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

Laurence van Lent

Frankfurt School of Finance and Management

Ahmed Tahoun

London Business School

Multiple version iconThere are 5 versions of this paper

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

Suggested Citation

Hassan, Tarek Alexander and Hollander, Stephan and van Lent, Laurence and Tahoun, Ahmed, The Global Impact of Brexit Uncertainty (July 15, 2022). TRR 266 Accounting for Transparency Working Paper Series No. 11, Available at SSRN: https://ssrn.com/abstract=3840164 or http://dx.doi.org/10.2139/ssrn.3840164

Tarek Alexander Hassan

Boston University ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stephan Hollander

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

P.O. Box 90153
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

Laurence Van Lent (Contact Author)

Frankfurt School of Finance and Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

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

Ahmed Tahoun

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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