The heterogeneous impact of Brexit: Early indications from the FTSE

By Ronald B. Davies, Z. Studnicka. European Economic Review, 2018

118 citations recorded by the source corpus.

The UK’s decision to leave the EU is surrounded by several studies simulating its potential effects. Alternatively, we examine expectations embodied in stock returns using a two-part estimation process. While most firms’ prices fell, there was considerable heterogeneity in their relative changes. We show that this heterogeneity can be explained by the firm’s global value chain, with heavily European firms doing relatively worse. For firms with few imported intermediates, this was partially offset by a greater Sterling depreciation. These changes were primarily in the first two days and highly persistent. Understanding these movements gives a better understanding Brexit’s potential effects.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/106df060891c2d86df9a610308754c7a639c2628

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Finance

Citations in the corpus

The Costs of Economic Nationalism: Evidence from the Brexit Experiment* (2019, background): “Davies and Studnicka (2018) also study the response of stock returns to the Brexit vote and ﬁnd considerable heterogeneity.”
The Impact of Brexit on UK Firms (2019, unknown): “Indeed, Davies and Studnicka (2018) show that, in the two trading days following the EU referendum, companies that rely more heavily on European global value chains reported more negative returns.”