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The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel

Author

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  • Wen Chen
  • Bart Los
  • Philip McCann
  • Raquel Ortega‐Argilés
  • Mark Thissen
  • Frank van Oort

Abstract

In this paper we employ an extension of the World Input‐Output Database (WIOD) with regional detail for EU countries to study the degree to which EU regions and countries are exposed to negative trade‐related consequences of Brexit. We develop an index of this exposure, which incorporates all effects due to geographically fragmented production processes within the UK, the EU and beyond. Our findings demonstrate that UK regions are far more exposed than regions in other countries. Only regions in the Republic of Ireland face exposure levels similar to some UK regions, while the next most affected regions are in Germany, The Netherlands, Belgium and France. This imbalance may influence the outcomes of the negotiations between the UK and the EU. En este artículo se emplea una extensión de la Base de Datos Mundial de Input‐Output (WIOD, por sus siglas en inglés) con detalles regionales para los países de la UE, con el fin de estudiar en qué medida están expuestas las regiones y los países de la UE a las consecuencias negativas de Brexit relacionadas con el comercio. Se desarrolla un índice de esta exposición, que incorpora todos los efectos debidos a los procesos de producción fragmentados geográficamente dentro del Reino Unido, la UE y el resto del mundo. Los hallazgos demuestran que las regiones del Reino Unido están mucho más expuestas que las regiones de otros países. Tan solo las regiones de la República de Irlanda se enfrentan a niveles de exposición similares a algunas de las regiones del Reino Unido, mientras que las siguientes regiones más afectadas se encuentran en Alemania, los Países Bajos, Bélgica y Francia. Este desequilibrio puede influir en los resultados de las negociaciones entre el Reino Unido y la UE. 本稿では、EU加盟国の地域の詳細情報を加えた、拡張版World Input‐Output Database (WIOD) を使用して、EU内の地域およびEU加盟国が、貿易に関してブレグジッド(Brexit:イギリスのEU離脱)の悪影響をどの程度受けているかを検討する。本稿では、イギリス国内、EU内、さらに広範囲に地理的に分断されている生産プロセスによるあらゆる効果を組み込んだ、ブレグジッドの影響の程度を示す指標を作成する。結果から、イギリスの地域は他の国の地域よりも悪影響をはるかに大きく受けていることが示される。アイルランド共和国の地域のみが、イギリスの一部の地域に近いレベルで悪影響を受けており、ドイツ、オランダ、ベルギー、フランス、以上の各国の地域がこれに続く。この不均衡はイギリスとEU間の交渉の結果に影響する可能性がある。

Suggested Citation

  • Wen Chen & Bart Los & Philip McCann & Raquel Ortega‐Argilés & Mark Thissen & Frank van Oort, 2018. "The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 25-54, March.
  • Handle: RePEc:bla:presci:v:97:y:2018:i:1:p:25-54
    DOI: 10.1111/pirs.12334
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    File URL: https://doi.org/10.1111/pirs.12334
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    Cited by:

    1. Raffaele Giammetti & Alberto Russo & Mauro Gallegati, 2020. "Key sectors in input–output production networks: An application to Brexit," The World Economy, Wiley Blackwell, vol. 43(4), pages 840-870, April.
    2. Ali-Yrkkö, Jyrki & Kuusi, Tero, 2019. "Brexit and Indirect Impact Routes through Global Value Chains," ETLA Reports 89, The Research Institute of the Finnish Economy.
    3. Fidrmuc, Jan & Hulényi, Martin & Tunalı, Çiğdem Börke, 2019. "Can money buy EU love?," European Journal of Political Economy, Elsevier, vol. 60(C).
    4. Rasa Stasiukynaite, 2019. "Reordering international trade: what will it cost?," Bank of Lithuania Occasional Paper Series 27, Bank of Lithuania.
    5. Rita Cappariello & Michele Mancini, 2019. "US trade policy in numbers: how exposed is the EU?," Questioni di Economia e Finanza (Occasional Papers) 528, Bank of Italy, Economic Research and International Relations Area.
    6. Anastasios Kitsos & André Carrascal-Incera & Raquel Ortega-Argilés, 2019. "The Role of Embeddedness on Regional Economic Resilience: Evidence from the UK," Sustainability, MDPI, Open Access Journal, vol. 11(14), pages 1-19, July.
    7. Raffaele Giammetti, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," Mo.Fi.R. Working Papers 152, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    8. Pieter IJtsma & Bart Los, 2020. "UK Regions in Global Value Chains," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2020-08, Economic Statistics Centre of Excellence (ESCoE).
    9. Leonie Wenz & Anders Levermann & Sven Norman Willner & Christian Otto & Kilian Kuhla, 2020. "Post-Brexit no-trade-deal scenario: Short-term consumer benefit at the expense of long-term economic development," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-14, September.
    10. Fetzer, Thiemo & Wang, Shizhou, 2020. "Measuring the Regional Economic Cost of Brexit: Evidence up to 2019," The Warwick Economics Research Paper Series (TWERPS) 1280, University of Warwick, Department of Economics.
    11. Mauro Caselli & Andrea Fracasso & Silvio Traverso, 2019. "Globalization, robotization and electoral outcomes: Evidence from spatial regressions for Italy," DEM Working Papers 2019/5, Department of Economics and Management.
    12. Mark Thissen & Frank van Oort & Philip McCann & Raquel Ortega-Argilés & Trond Husby, 2019. "The Implications of Brexit for UK and EU Regional Competitiveness," Tinbergen Institute Discussion Papers 19-061/VIII, Tinbergen Institute.
    13. Robert Urbatsch, 2020. "Trade connections’ effect on European regions’ interest in Brexit," European Union Politics, , vol. 21(1), pages 173-179, March.
    14. Roberta Capello & Andrea Caragliu, 0. "Merging macroeconomic and territorial determinants of regional growth: the MASST4 model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 0, pages 1-38.
    15. Bergin, Adele & Economides, Philip & Garcia-Rodriguez, Abian & Murphy, Gavin, 2019. "Ireland and Brexit: modelling the impact of deal and no-deal scenarios," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    16. Giammetti, Raffaele, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," MPRA Paper 92835, University Library of Munich, Germany.
    17. Bart Los & Marcel P. Timmer, 2020. "Measuring Bilateral Exports of Value Added: A Unified Framework," NBER Chapters, in: The Challenges of Globalization in the Measurement of National Accounts, National Bureau of Economic Research, Inc.
    18. Jyrki Ali-Yrkkö & Tero Kuusi, 2020. "Shield the US from Imports! – GDP impacts on Finland and other European Union member states," Finnish Economic Papers, Finnish Economic Association, vol. 29(1), pages 52-80, Spring.

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