2025/08/06 by Hang Do, Kiet Tuan Duong, Luu Duc Toan Huynh +1 · 1 voice
Economics, Econometrics and Finance · #Firm Innovation and Growth #Italy: Economic History and Contemporary Issues #Global trade and economics
paper · doi:10.1016/j.jinteco.2025.104129
openalex publication_date 2025/08/06 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23
Using the distance to the Irish border of UK firms that have not changed their location since the 2016 Referendum to isolate the effects of Brexit at the firm level, we find that Brexit implementation in 2020 caused exposed firms to cut their workforce by up to 15.7% on average relative to non-exposed firms. These exposed firms are also more likely to have lower growth expectations and more likely to increase their research and development (R&D) expenditure. In addition, having ex-ante trade exposure, either with or outside the EU, can help alleviate such negative effects of Brexit. Such results highlight the role of trade exposure and the expectation channel, and support the hypothesis that firms prioritize innovations in response to Brexit.