Trade and foreign direct investment-related impacts of Brexit

We offer a general-equilibrium analysis of Brexit incorporating the state-of-the-art differences in productivity and firms' selection within manufacturing sectors à la Melitz (Econometrica, 2003, 71, 1695) and multinationals in services. Our results suggest that trade, output and average produ...

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Detalhes bibliográficos
Autores: Latorre Muñoz, María De La Concepción, Olekseyuk, Zoryana, Yonezawa, Hidemichi
Formato: artículo
Fecha de publicación:2020
País:España
Recursos:Universidad Complutense de Madrid (UCM)
Repositorio:Docta Complutense
Idioma:inglés
OAI Identifier:oai:docta.ucm.es:20.500.14352/97580
Acesso em linha:https://hdl.handle.net/20.500.14352/97580
Access Level:acceso abierto
Palavra-chave:339
339.7
330.43
Melitz
Monopolistic competition
Multinationals
Trade in services
Comercio
Econometría (Estadística)
Empresas
5304.04 Comercio Exterior
5310.07 Inversión Exterior
5302 Econometría
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oai_identifier_str oai:docta.ucm.es:20.500.14352/97580
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repository_id_str
spelling Trade and foreign direct investment-related impacts of BrexitLatorre Muñoz, María De La ConcepciónOlekseyuk, ZoryanaYonezawa, Hidemichi339339.7330.43MelitzMonopolistic competitionMultinationalsTrade in servicesComercioEconometría (Estadística)Empresas5304.04 Comercio Exterior5310.07 Inversión Exterior5302 EconometríaWe offer a general-equilibrium analysis of Brexit incorporating the state-of-the-art differences in productivity and firms' selection within manufacturing sectors à la Melitz (Econometrica, 2003, 71, 1695) and multinationals in services. Our results suggest that trade, output and average productivity diminish across most sectors in the UK and the Rest of the European Union (REU), as well as GDP, welfare, wages and capital remuneration. However, the UK loses more due to the missing preferential access to the huge EU market. Significant welfare losses along the extensive margin occur in the UK due to the lost imported varieties produced by highly productive European firms. These cannot be compensated by the new varieties of less productive domestic firms that enter the British market due to increased protectionism and reduced import competition. In addition, the emergence of barriers against multinationals, which is often ignored in previous studies, explains approximately one third of the negative effect in both the UK and REU. Furthermore, we show that the Brexit impact is about only half if we do not include both foreign direct investment barriers and Melitz structure. Thus, previous studies without these important model features would underestimate the Brexit impact significantly.John Wiley & Sons LtdGreenaway, DavidMilner, ChrisUniversidad Complutense de Madrid20202020-01-0120202020-01-01journal articlehttp://purl.org/coar/resource_type/c_6501VoRhttp://purl.org/coar/version/c_970fb48d4fbd8a85info:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/20.500.14352/97580reponame:Docta Complutenseinstname:Universidad Complutense de Madrid (UCM)Inglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial-NoDerivatives 4.0 Internationalhttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:docta.ucm.es:20.500.14352/975802026-06-02T12:44:21Z
dc.title.none.fl_str_mv Trade and foreign direct investment-related impacts of Brexit
title Trade and foreign direct investment-related impacts of Brexit
spellingShingle Trade and foreign direct investment-related impacts of Brexit
Latorre Muñoz, María De La Concepción
339
339.7
330.43
Melitz
Monopolistic competition
Multinationals
Trade in services
Comercio
Econometría (Estadística)
Empresas
5304.04 Comercio Exterior
5310.07 Inversión Exterior
5302 Econometría
title_short Trade and foreign direct investment-related impacts of Brexit
title_full Trade and foreign direct investment-related impacts of Brexit
title_fullStr Trade and foreign direct investment-related impacts of Brexit
title_full_unstemmed Trade and foreign direct investment-related impacts of Brexit
title_sort Trade and foreign direct investment-related impacts of Brexit
dc.creator.none.fl_str_mv Latorre Muñoz, María De La Concepción
Olekseyuk, Zoryana
Yonezawa, Hidemichi
author Latorre Muñoz, María De La Concepción
author_facet Latorre Muñoz, María De La Concepción
Olekseyuk, Zoryana
Yonezawa, Hidemichi
author_role author
author2 Olekseyuk, Zoryana
Yonezawa, Hidemichi
author2_role author
author
dc.contributor.none.fl_str_mv Greenaway, David
Milner, Chris
Universidad Complutense de Madrid
dc.subject.none.fl_str_mv 339
339.7
330.43
Melitz
Monopolistic competition
Multinationals
Trade in services
Comercio
Econometría (Estadística)
Empresas
5304.04 Comercio Exterior
5310.07 Inversión Exterior
5302 Econometría
topic 339
339.7
330.43
Melitz
Monopolistic competition
Multinationals
Trade in services
Comercio
Econometría (Estadística)
Empresas
5304.04 Comercio Exterior
5310.07 Inversión Exterior
5302 Econometría
description We offer a general-equilibrium analysis of Brexit incorporating the state-of-the-art differences in productivity and firms' selection within manufacturing sectors à la Melitz (Econometrica, 2003, 71, 1695) and multinationals in services. Our results suggest that trade, output and average productivity diminish across most sectors in the UK and the Rest of the European Union (REU), as well as GDP, welfare, wages and capital remuneration. However, the UK loses more due to the missing preferential access to the huge EU market. Significant welfare losses along the extensive margin occur in the UK due to the lost imported varieties produced by highly productive European firms. These cannot be compensated by the new varieties of less productive domestic firms that enter the British market due to increased protectionism and reduced import competition. In addition, the emergence of barriers against multinationals, which is often ignored in previous studies, explains approximately one third of the negative effect in both the UK and REU. Furthermore, we show that the Brexit impact is about only half if we do not include both foreign direct investment barriers and Melitz structure. Thus, previous studies without these important model features would underestimate the Brexit impact significantly.
publishDate 2020
dc.date.none.fl_str_mv 2020
2020-01-01
2020
2020-01-01
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
VoR
http://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/20.500.14352/97580
url https://hdl.handle.net/20.500.14352/97580
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv John Wiley & Sons Ltd
publisher.none.fl_str_mv John Wiley & Sons Ltd
dc.source.none.fl_str_mv reponame:Docta Complutense
instname:Universidad Complutense de Madrid (UCM)
instname_str Universidad Complutense de Madrid (UCM)
reponame_str Docta Complutense
collection Docta Complutense
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,301603

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