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The economic effects of Brexit : evidence from the stock market
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Breinlich, Holger, Leromain, Elsa, Novy, Dennis, Sampson, Thomas and Usman, Ahmed (2018) The economic effects of Brexit : evidence from the stock market. Fiscal Studies, 39 (4). pp. 581-623. doi:10.1111/1475-5890.12175
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Official URL: http://dx.doi.org/10.1111/1475-5890.12175
Abstract
We study stock market reactions to the Brexit referendum on 23 June 2016 in order to assess investors’ expectations about the effects of leaving the European Union on the UK economy. Our results suggest that initial stock price movements were driven by fears of a cyclical downturn and by the sterling depreciation following the referendum. We also find tentative evidence that market reactions to two subsequent speeches by Theresa May (her Conservative party conference and Lancaster House speeches) were more closely correlated with potential changes to tariffs and non‐tariff barriers on UK–EU trade, indicating that investors may have updated their expectations in light of the possibility of a ‘hard Brexit’. We do not find a correlation between the share of EU immigrants in different industries and stock market returns.
| Item Type: | Journal Article | ||||||
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| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||||
| Divisions: | Faculty of Social Sciences > Economics | ||||||
| Library of Congress Subject Headings (LCSH): | European Union -- Great Britain -- Commerce, Stock exchanges -- London (England), Pound, British, May, Theresa, 1956- | ||||||
| Journal or Publication Title: | Fiscal Studies | ||||||
| Publisher: | Wiley-Blackwell Publishing, Inc | ||||||
| ISSN: | 0143-5671 | ||||||
| Official Date: | 18 December 2018 | ||||||
| Dates: |
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| Volume: | 39 | ||||||
| Number: | 4 | ||||||
| Page Range: | pp. 581-623 | ||||||
| DOI: | 10.1111/1475-5890.12175 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Open Access | ||||||
| RIOXX Funder/Project Grant: |
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