Journal of Finance Vol. 79 No. 1 2024

The Global Impact of Brexit Uncertainty

Tarek A. Hassan^1,2,3,4,5,6; Stephan Hollander^1,2,3,4,5,6; Laurence van Lent^1,2,3,4,5,6; Ahmed Tahoun⁷

¹ Boston University · ² Center for Economic and Policy Research · ³ Tilburg University · ⁴ Banque de France · ⁵ Bay State College · ⁶ Singapore Management University · ⁷ Steinbeis Foundation

Abstract

We propose a text‐based method for measuring the cross‐border propagation of large shocks at the firm level. We apply this method to estimate the expected costs, benefits, and risks of Brexit and find widespread reverberations in listed firms in 81 countries. International (i.e., non‐U.K.) firms most exposed to Brexit uncertainty (the second moment) lost significant market value and reduced hiring and investment. International firms also overwhelmingly expected negative first‐moment impacts from the U.K.'s decision to leave the European Union (EU), particularly related to regulation, asset prices, and labor market impacts of Brexit.

DOI

10.1111/jofi.13293

Volume

79

Issue

1

Pages

413-458

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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