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The negative impact of disintegration on trade: the case of Brexit

Author

Listed:
  • Juan de Lucio

    (Universidad de Alcalá. Pza. San Diego, s/n, 28801, Alcalá de Henares (Spain).)

  • Raúl Mínguez

    (Cámara de Comercio de España and Universidad Antonio de Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).)

  • Asier Minondo

    (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain).)

  • Francisco Requena

    (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)

Abstract

Using firm-level export and import transactions and by applying an event-study methodology, we quantify the impact of the UK's withdrawal from the EU's single market and customs union on Spain-UK trade flows. We find that Spanish exports and imports to the UK decreased by 23% and 27%, respectively, relative to the period before the Brexit referendum. Spanish exporters and importers entry into the UK declined and the probability of ending a trade relationship with the UK increased. Products affected by sanitary and phytosanitary measures, and more stringent rules of origin experienced a stronger decline in trade flows. Large firms faced a more severe decrease in exports than small ones after disintegration.

Suggested Citation

  • Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2023. "The negative impact of disintegration on trade: the case of Brexit," Working Papers 2302, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2302
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    References listed on IDEAS

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    More about this item

    Keywords

    Brexit; trade costs; trade policy uncertainty; Spanish Firms; rules of origin; European Union.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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