Impact of Brexit on UK Firms, New NBER Report
The Washington, D.C.-based National Bureau of Economic Research (NBER) in September 2019 published a working paper, The Impact of Brexit on UK Firms, authored by Nicholas Bloom, Philip Bunn, Scarlet Chen, Paul Mizen, Pawel Smietanka, and Gregory Thwaites.
The authors identify three key results from a survey of UK firms, the Decision Maker Panel.
According to the abstract of the 59-page article:
“First, the UK’s decision to leave the EU has generated a large, broad and long-lasting increase in uncertainty.
“Second, anticipation of Brexit is estimated to have gradually reduced investment by about 11% over the three years following the June 2016 vote. This fall in investment took longer to occur than predicted at the time of the referendum, suggesting that the size and persistence of this uncertainty may have delayed firms’ response to the Brexit vote.
“Finally, the Brexit process is estimated to have reduced UK productivity by between 2% and 5% over the three years after the referendum. Much of this drop is from negative within-firm effects, in part because firms are committing several hours per week of top-management time to Brexit planning. [The authors] also find evidence for smaller negative between-firm effects as more productive, internationally exposed, firms have been more negatively impacted than less productive domestic firms.”
Nicholas Bloom works in Stanford University’s Department of Economics; Philip Bunn and Pawel Smietanka for the Bank of England; Scarlet Chen at Stanford University; Paul Mizen in the Department of Economics of Nottingham University; and Gregory Thwaites in the Centre for Macroeconomics at the London School of Economics.