Economic Analysis of Multinationals Firms in the UK after Brexit

Gabriela Ortiz Valverde and María C. Latorre

No 333099, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper provides an impact assessment of Brexit considering the role of foreign multinationals enterprises (MNEs) in the United Kingdom (UK). We extend our previous research, which has estimated the potential impact of Brexit focusing on migration and trade (Ortiz and Latorre; 2018a, 2018b) including the impact of a reduction in the inflow of FDI and the effect of fiscal savings once Brexit comes into force. The incorporation of FDI and multinationals' operations in the analysis of Brexit has received scarce attention in the literature (Fernández-Pacheco et al, 2018a; Fernández-Pacheco et al, 2018b). However, it could lead to closer results to the potential effects of Brexit and therefore identify possible ways to minimize its negative impact. In this paper, we provide results not only related to FDI falls and fiscal savings but also those produced by the rest of dimensions considered in the study (tariffs, non-tariffs barriers, and immigration restrictions). To this aim, we use a recursive dynamic computable general equilibrium (CGE) model, namely, the GTAP Recursive Dynamic (GTAP-RD) model (Aguiar et al., 2019), which incorporates imperfect competition, increasing returns to scale and Melitz specification based on the parsimonious GTAP-AEKM (Armington-Ethier-Krugman-Melitz) extension. The model will distinguish 21 sectors and five regions: UK, EU, US, China, and ROW). The model allows estimating the impact on GDP, welfare, wages, and capital remuneration, together with the evolution of aggregate and sectoral output, exports and imports.

Keywords: Political; Economy (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/333099/files/9344.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333099

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().