How did Brexit impact EU trade? Evidence from real data

• DOI: 10.1111/twec.13419
• Publication Date: 2023-04-20T04:12:33Z
• Authors: Steven Buigut; Burcu Kapar
• Keywords: Brexit; Referendum; Eu countries

Abstract At the time it voted to exit in 2016, UK was a leading economy within EU. It contributed about 16 percent of EU GDP, while other countries accounted for almost half UK's total trade. This study attempts answer two research questions: First, how Brexit affected EU–UK trade and second, between remaining 27 members. To these questions, quarterly data are exploited period from 2005Q1 2022Q3 covering 53 trading partners including A gravity model that controls unobserved bilateral heterogeneity multilateral resistance is estimated by PPML. Three phases (the referendum, transition, post transition [under TCA]) analysed. The results indicate referendum phase depressed UK–EU around 10.5%, 15%. In both cases, particularly phase, effect greater on imports than exports We do not find significant due (TCA) phase. Estimates show some mild but positive intra‐EU 1.5% 4.6% respectively, no suggests with redirected Hence should aggressively seek out new agreements blocs as well refine workings cooperation agreement signed minimise loss.