The Global Impact of Brexit Uncertainty
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.
TAREK A. HASSAN & STEPHAN HOLLANDER & LAURENCE VAN LENT & AHMED TAHOUN, 2024. "The Global Impact of Brexit Uncertainty," The Journal of Finance, vol 79(1), pages 413-458.