The Global Impact of Brexit Uncertainty

Tarek Hassan, Stephan Hollander, Laurence van Lent and Ahmed Tahoun

No 14253, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Brexit; Uncertainty; Sentiment; Machine learning; Cross-country effects (search for similar items in EconPapers)
JEL-codes: D8 E22 E24 E32 E6 F0 G18 G32 G38 H32 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-big, nep-cmp, nep-int and nep-mac
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Global Impact of Brexit Uncertainty (2024)
Working Paper: The Global Impact of Brexit Uncertainty (2020)
Working Paper: The Global Impact of Brexit Uncertainty (2020)
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