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

Author

Listed:
  • Crowley, M. A.
  • Exton, O.
  • Han, L.

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.

Suggested Citation

  • Crowley, M. A. & Exton, O. & Han, L., 2018. "Renegotiation of Trade Agreements and Firm Exporting Decisions: Evidence from the Impact of Brexit on UK Exports," Cambridge Working Papers in Economics 1839, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1839
    Note: mc865, lh420, oe219
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    References listed on IDEAS

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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