How did the Brexit uncertainty impact services exports of UK firms?
brexit
firms
services-trade
firm-level
Journal of International Business Policy, 2025. With Jun Du and Xiaocan Yuan.
Using firm-level data and a synthetic difference-in-differences design, we estimate that Brexit-related policy uncertainty reduced UK services exports by 9.2% a year on average, a cumulative loss of roughly USD 146.8 billion between 2016 and 2019 — distinct from, and larger than, the effect of the tariff and non-tariff barriers that eventually took effect. The impact fell disproportionately on small and medium-sized exporters, while multinational enterprises were more likely to relocate operations outside the UK altogether.
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Using firm-level data and a synthetic difference-in-differences design, we estimate that Brexit-related policy uncertainty reduced UK services exports by 9.2% a year on average, a cumulative loss of roughly USD 146.8 billion between 2016 and 2019 — distinct from, and larger than, the effect of the tariff and non-tariff barriers that eventually took effect. The impact fell disproportionately on small and medium-sized exporters, while multinational enterprises were more likely to relocate operations outside the UK altogether.
Brexit-related uncertainty had a measurable, negative effect on UK firms’ services exports — distinct from, and in some respects larger than, the effect of the tariff and non-tariff barriers that eventually took effect. Using firm-level export data and a synthetic difference-in-differences design, we isolate the uncertainty channel from the trade-policy channel by comparing UK firms to a synthetic control built from firms in countries that faced no comparable shock.
Published in: Journal of International Business Policy, 8(1), 80–104