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Faculty of Economics

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Crowley, M. A., Exton, O. and Han, L.

Renegotiation of Trade Agreements and Firm Exporting Decisions: Evidence from the Impact of Brexit on UK Exports

CWPE1839

Abstract: The renegotiation of a trade agreement introduces uncertainty into the economic environment. We exploit the natural experiment of the Brexit referendum to estimate the impact of uncertainty associated with trade agreement renegotiation. Empirically, we develop measures of the trade policy uncertainty facing firms exporting from the UK to the EU after June 2016. Using the universe of UK export transactions at the firm and product level, we estimate entry (exit) in 2016 would have been 5.0% higher (6.1% lower) if firms exporting from the UK to the EU had not faced increased trade policy uncertainty after June 2016.

Author links: Meredith Crowley  Lu Han  Oliver Exton  

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1839.pdf

Open Access Link: https://doi.org/10.17863/CAM.27669