The Global Impact of Brexit Uncertainty

Hassan, T A, van Lent, L, Hollander, S and Tahoun, A (2024) The Global Impact of Brexit Uncertainty. Journal of Finance, 79 (1). pp. 413-458. ISSN 0022-1082

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-UK) 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 UK's decision to leave the EU, particularly related to regulation, asset prices, and labor market impacts of Brexit.