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A first look at Brexit and global equity markets

Author

Listed:
  • Richard C. K. Burdekin
  • Eric Hughson
  • Jinlin Gu

Abstract

Global equity markets fell by nearly 5% overall on 24 June 2016 following news of the Brexit referendum result. Although nearly all EU stock market indices experienced additional significantly negative abnormal returns, especially poor performance was registered by the debt-ridden PIIGS group (Portugal, Ireland, Italy, Greece and Spain). In this article, we identify a systematic tendency for more severe stock market responses to be concentrated amongst countries with higher debt to GDP ratios. This effect endures even after controlling for the degree of openness, EU membership and for being part of the PIIGS group.

Suggested Citation

  • Richard C. K. Burdekin & Eric Hughson & Jinlin Gu, 2018. "A first look at Brexit and global equity markets," Applied Economics Letters, Taylor & Francis Journals, vol. 25(2), pages 136-140, January.
    • Handle: RePEc:taf:apeclt:v:25:y:2018:i:2:p:136-140
    DOI: 10.1080/13504851.2017.1302057
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    Cited by:

    1. Galán-Gutiérrez, Juan Antonio & Martín-García, Rodrigo, 2021. "Cointegration between the structure of copper futures prices and Brexit," Resources Policy, Elsevier, vol. 71(C).
    2. Júlio Lobão & Sílvia Santos, 2019. "Stock Market Reaction To Brexit Announcements: Evidence From A Natural Experiment," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 1-17, September.
    3. Razvan Stefanescu & Ramona Dumitriu, 2023. "The Extended January Effect on London Stock Exchange," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 104-114.
    4. Siphumlile Mangisa & Sonali Das & Rangan Gupta, 2022. "Analyzing The Impact Of Brexit On Global Uncertainty Using Functional Linear Regression With Point Of Impact: The Role Of Currency And Equity Markets," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 67(04), pages 1377-1388, June.
    5. Apostolakis, George N. & Floros, Christos & Gkillas, Konstantinos & Wohar, Mark, 2021. "Political uncertainty, COVID-19 pandemic and stock market volatility transmission," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 74(C).
    6. Sunday Ewah & Joseph E. Osang, 2018. "Influence Of Cross Cultural Differences on International Marketing," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 8(7), pages 363-376, July.
    7. Catalina Bolancé & Carlos Alberto Acuña & Salvador Torra, 2022. "Non-Normal Market Losses and Spatial Dependence Using Uncertainty Indices," Mathematics, MDPI, vol. 10(8), pages 1-23, April.
    8. Camilo J. Vázquez‐Ordás & Myriam García‐Olalla, 2020. "The Differential Impact of Brexit on Banking: UK vs. Europe," Global Policy, London School of Economics and Political Science, vol. 11(5), pages 569-577, November.
    9. Candelaria, John Lee & Sharifi, Ayyoob & Simangan, Dahlia & Tabosa, Rebeca Maria Ramos, 2023. "A critical analysis of selected global sustainability assessment frameworks: Toward integrated approaches to peace and sustainability," World Development Perspectives, Elsevier, vol. 32(C).
    10. Tihana Škrinjarić, 2019. "Stock Market Reactions to Brexit: Case of Selected CEE and SEE Stock Markets," IJFS, MDPI, vol. 7(1), pages 1-14, January.
    11. Menashy, Francine & Zakharia, Zeena, 2023. "Partnerships for education in emergencies: The intersecting promises and challenges of SDG 4 and SDG 17," International Journal of Educational Development, Elsevier, vol. 103(C).
    12. Oussama Tilfani & Paulo Ferreira & Andreia Dionisio & My Youssef El Boukfaoui, 2020. "EU Stock Markets vs. Germany, UK and US: Analysis of Dynamic Comovements Using Time-Varying DCCA Correlation Coefficients," JRFM, MDPI, vol. 13(5), pages 1-23, May.
    13. Li, Hong, 2020. "Volatility spillovers across European stock markets under the uncertainty of Brexit," Economic Modelling, Elsevier, vol. 84(C), pages 1-12.
    14. Shah, Ritesh & Cardozo, Mieke Lopes & Hjarrand, Jessica, 2024. "Learning as ecosystems: Shifting paradigms for more holistic programming in education and displacement," International Journal of Educational Development, Elsevier, vol. 104(C).
    15. Barbarossa, Camilla & Buzeta, Cristian & De Pelsmacker, Patrick & Moons, Ingrid, 2022. "Foreign company misconduct and how consumers’ punitive intent is influenced by country stereotypes and the perceived similarity between the foreign country and the home country," International Business Review, Elsevier, vol. 31(5).
    16. Tzung Hsuen Khoo & Dharini Pathmanathan & Sophie Dabo-Niang, 2023. "Spatial Autocorrelation of Global Stock Exchanges Using Functional Areal Spatial Principal Component Analysis," Mathematics, MDPI, vol. 11(3), pages 1-24, January.
    17. Iglesias, Emma M., 2022. "The influence of extreme events such as Brexit and Covid-19 on equity markets," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 418-430.
    18. Millington, Tristan & Niranjan, Mahesan, 2021. "Stability and similarity in financial networks—How do they change in times of turbulence?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 574(C).
    19. Kamer-Ainur Aivaz & Ionela Florea Munteanu & Mari-Isabella Stan & Alina Chiriac, 2022. "A Multivariate Analysis of the Links between Transport Noncompliance and Financial Uncertainty in Times of COVID-19 Pandemics and War," Sustainability, MDPI, vol. 14(16), pages 1-23, August.
    20. Michael Filletti, 2020. "Investigating the influence Brexit had on Financial Markets, in particular the GBP/EUR exchange rate," Papers 2003.05895, arXiv.org.

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