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The Global Impact of Brexit Uncertainty

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  • TAREK A. HASSAN
  • STEPHAN HOLLANDER
  • LAURENCE VAN LENT
  • AHMED TAHOUN

Abstract

We propose a text‐based method for measuring the cross‐border propagation of large shocks at the firm level. We apply this method to estimate the expected costs, benefits, and risks of Brexit and find widespread reverberations in listed firms in 81 countries. International (i.e., non‐U.K.) firms most exposed to Brexit uncertainty (the second moment) lost significant market value and reduced hiring and investment. International firms also overwhelmingly expected negative first‐moment impacts from the U.K.'s decision to leave the European Union (EU), particularly related to regulation, asset prices, and labor market impacts of Brexit.

Suggested Citation

  • Tarek A. Hassan & Stephan Hollander & Laurence Van Lent & Ahmed Tahoun, 2024. "The Global Impact of Brexit Uncertainty," Journal of Finance, American Finance Association, vol. 79(1), pages 413-458, February.
    • Handle: RePEc:bla:jfinan:v:79:y:2024:i:1:p:413-458
    DOI: 10.1111/jofi.13293
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