Brexit Uncertainty and its (Dis)Service Effects

The bilateral trade effects of announcement shocks: Brexit as a natural field experiment

“…We do not investigate services exports in this paper, due to the lack of a comparable long string of bilateral services trade data. However, Douch and Edwards (2021), using aggregate services export data, and Ahmad et al (2020), using a shorter run of bilateral services export data, confirm that policy uncertainty has had similar effects in services.…”

“…The inclusion of uncertainty and announcement effects in this literature is recent and linked to the Brexit announcement shock. Key papers include studies of the goods market by Crowley et al (2018), Graziano et al (2018), Douch et al (2020), Douch (2020), Graziano et al (2020b), Crowley et al (2020), and Graziano et al (2020a) and of services (Ahmad et al (2020); Douch and Edwards (2021)). While some of these papers look at firm-level entry decisions and others at product-level effects, all found evidence of a deterrence effect of the uncertainty and anticipated trade costs.…”

The Heterogeneous Effect of Uncertainty on Firms Trade Margins Destruction and Diversion

“…this topic (Ahmad et al 2020, Graziano et al 2020b), it is difficult to predict whether Brexit uncertainty affected imports in an analogous way to exports or if instead the effect was asymmetric. Thus, this analysis will provide initial empirical evidence on the differential impact of policy uncertainty on exports and imports across firms size.…”

“…Similarly, related studies looking at the effect of Brexit uncertainty on trade in services in the UK, have identified a significant negative impact both in terms of trade values and participation, heterogeneous across exported services (Ahmad et al 2020, Douch & Edwards 2021b). More generally, previous studies have shown that the high uncertainty brought about by the Brexit process has affected investment and other business decisions, for example foreign direct investments (Dhingra et al 2018, Breinlich et al 2020, prompting firms to alter their plans and strategies (Bloom, Bunn, Chen, Mizen, Smietanka & Thwaites 2019) 2 .…”

The Effect of Brexit on British Workers Living in the EU

“…The wide range of estimates is due to the diversity of methodologies, scenarios and channels that were considered. These studies examined the effect of Brexit on UK's gross domestic product (Born et al, 2019a), inflation and real wages (Breinlich et al, 2020), exchange rate and consumer prices (Breinlich et al, 2018(Breinlich et al, , 2019, firms investments and productivity (Bloom et al, 2019), trade (Crowley et al, 2018;Graziano et al, 2021Graziano et al, , 2020Ahmad et al, 2020), migration (Booth et al, 2015;Portes and Forte, 2017;Jafari and Britz, 2017), medium-sized enterprises (SMEs) (Brown et al, 2019), loan issuances (Berg et al, 2021), and financial markets (Breinlich et al, 2018).…”