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The Brexit policy shock: were UK services exports affected, and when?

journal contribution
posted on 04.01.2021, 13:51 by Mustapha Douch, Huw EdwardsHuw Edwards
We analyse the impact of the Brexit announcement shock on UK exports of commercial services, using a synthetic control method (SCM) to create a counterfactual based upon other countries’ exports. Our analysis considers two alternative scenarios: in the first, the shock was based upon the referendum date of 23 June 2016. We do indeed find significant evidence of a treatment shock based upon this date, as exports after this date are approximately 7 per cent below the synthetic counterfactual. This is driven by ‘other commercial services’: the smaller tourist sector actually had a positive shock. If we repeat the analysis with an earlier treatment, it becomes clear that divergence was already starting in the first half of 2015, around the time of the general election campaign, although services exports had a clearer shock after June 2016, roughly doubling the discrepancy. This finding supports the suggestion that there was already some fear of Brexit before the referendum result, and indicates the importance of considering an earlier start date in studies of the Brexit shock.

History

School

  • Business and Economics

Department

  • Economics

Published in

Journal of Economic Behavior and Organization

Volume

182

Pages

248-263

Publisher

Elsevier

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Journal of Economic Behavior and Organization and the definitive published version is available at https://doi.org/10.1016/j.jebo.2020.12.025

Acceptance date

21/12/2020

Publication date

2020-12-31

Copyright date

2021

ISSN

0167-2681

Language

en

Depositor

Dr Huw Edwards. Deposit date: 24 December 2020