Breinlich, Holger, Leromain, Elsa, Novy, Dennis and Sampson, Thomas (2020) Voting with their money : Brexit and outward investment by UK firms. European Economic Review , 124 . 103400. doi:10.1016/j.euroecorev.2020.103400 ISSN 0014-2921.

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Abstract

We study the impact of the 2016 Brexit referendum on UK foreign direct investment. Using the synthetic control method to construct appropriate counterfactuals, we show that by March 2019 the Leave vote had led to a 17% increase in the number of UK outward investment transactions in the remaining EU27 member states, whereas transactions in non-EU OECD countries were unaffected. These results support the hypothesis that UK companies have been setting up European subsidiaries to retain access to the EU market after Brexit. At the same time, we find that the number of EU27 investment projects in the UK has declined by around 9%, illustrating that being a smaller economy than the EU leaves the UK more exposed to the costs of economic disintegration.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	European Economic Review
Publisher:	Elsevier
ISSN:	0014-2921
Official Date:	May 2020
Dates:	Date Event May 2020 Published 15 February 2020 Available 6 February 2020 Accepted
Volume:	124
Article Number:	103400
DOI:	10.1016/j.euroecorev.2020.103400
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Date of first compliant deposit:	12 February 2020
Date of first compliant Open Access:	15 February 2022
Related URLs:	Publisher

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