The Heterogeneous Impact of Brexit: Early Indications from the FTSE

Davies, Ronald B.; Studnicka, Zuzanna

doi:10.2139/ssrn.2985332

Cited by 14 publications

(18 citation statements)

References 14 publications

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“…Bloom et al ., 2019; Born et al ., 2019; Hassan et al ., 2020; Hill, Korczak and Korczak, 2019; McGrattan and Waddle, 2020; Steinberg, 2019; Van Reenen, 2016) and the related impact on banks and financial markets (e.g. Berg et al ., 2019; Davies and Studnicka, 2018; Hudson, Urquhart and Zhang, 2020; Schiereck, Kiesel and Kolaric, 2016).…”

Section: Introductionmentioning

confidence: 99%

Deal or No Deal? Modelling the Impact of Brexit Uncertainty on UK Private Equity Activity

Kellard

Kontonikas

Lamla

et al. 2021

British J of Management

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Given uncertainty in policy, particularly around Brexit, how do private equity (PE) firms investing in the UK behave? Analysing their response is vital for understanding the impact on investment per se and designing policy that limits uncertainty. Building on the recent work of Mike Wright and co‐authors, we explore the effect of uncertainty measures on UK PE activity and the channels that transmit uncertainty to the PE market. After developing hypotheses that link the ‘PE activity and uncertainty’ relation via a real options, interim risk or moral hazard channel, we employ a novel dataset on PE targets and non‐targets over the 2010–2019 period. We find that uncertainty, especially new measures closely aligned to Brexit, have negatively affected PE activity in the UK. Moreover, the transmission of such uncertainty occurs primarily through the real options channel and through greater uncertainty arising from prolonged interim periods of PE deals (i.e. the interim risk channel). Our results imply that the present and ongoing uncertainty in Brexit policy will continue to depress PE activity and by extension, investment and growth in the UK. Policymakers are urged to resolve such uncertainties.

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Section: Introductionmentioning

confidence: 99%

Deal or No Deal? Modelling the Impact of Brexit Uncertainty on UK Private Equity Activity

Kellard

Kontonikas

Lamla

et al. 2021

British J of Management

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“…The magnitude of effects on the respective economies and on third countries depends on the "connectedness" 20 The heterogeneity of responses to services-trade de-liberalization is governed by structural parameters here. Davies and Studnicka (2017) provide reduced-form evidence supporting the notion of input-output-related heterogeneous responses of economic outcomes at the firm level to expected de-liberalization consequences associated with Brexit. Felbermayr et al (2018) and Dhingra et al (2017) provide a discussion of de-liberalization with a specific focus on Brexit.…”

Section: Abandoning Services-trade-agreement (Sta) Membership For Sel...mentioning

confidence: 66%

A structural quantitative analysis of services trade de-liberalization

Blank

Egger

Merlo

et al. 2022

Journal of International Economics

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“…Vertical MNEs are less likely to be resilient to local events since, just as the whole snake will die if you cut out a short middle part of its length, losing a key affiliate can have significant implications across the entire vertical MNE. Indeed, Davies and Studnicka (2018) link changes in the stock market valuations of British firms following the Brexit referendum to their vertical GVCs. An additional example from early 2020 was the affect of the novel coronavirus.…”

Section: Discussionmentioning

confidence: 99%

What do multinationals do? The structure of multinational firms’ international activities

Davies

Markusen

2021

World Economy

Self Cite

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Analyses of multinational enterprises have generally shifted from a capital‐market perspective to viewing them as real production units. Yet, we still have difficulties in answering a basic question: What do multinational enterprises do? Here, we seek some broad, general answers about the structure of multinational firms’ international activities. By structure, we include (a) the geographic distribution of a firm's activities, (b) activities performed by various branches, (c) where do foreign affiliates sell their outputs and purchase their inputs and (d) interactions among establishments. Much of our analysis relates to which of two archetypes is dominant: (1) horizontal structures in which foreign affiliates replicate the firm's core activities and serve local and regional markets and (2) vertical structures in which foreign affiliates perform different activities and act as links in a global production chain. Examining this from a variety of perspectives, we find that horizontal replication dominates vertical fragmentation. The final section of the paper discusses intangible assets and other service flows between parents and affiliates. Smoking‐gun evidence suggests that these are large, particularly compared to intra‐firm trade in goods. Despite this, their importance is undervalued, likely due to severe measurement difficulties.

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The Heterogeneous Impact of Brexit: Early Indications from the FTSE

Cited by 14 publications

References 14 publications

Deal or No Deal? Modelling the Impact of Brexit Uncertainty on UK Private Equity Activity

Deal or No Deal? Modelling the Impact of Brexit Uncertainty on UK Private Equity Activity

A structural quantitative analysis of services trade de-liberalization

What do multinationals do? The structure of multinational firms’ international activities

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