The impact of the Brexit vote on UK financial markets: a synthetic control method approach

Matej Opatrny

Empirica, 2021, vol. 48, issue 2, No 11, 559-587

Abstract: Abstract We estimate how the UK financial markets would have evolved if the Remain camp had won the referendum. To construct the counterfactual, we use the synthetic control method. Our results suggest that there would not have been any significant change in the development of the FTSE 100 Index in the medium to long term if there had not been a referendum. On the other hand, we find a significantly negative effect of 1.2 percentage points on the 10-year bond yield. Given the geopolitical circumstances in mid 2016, financial agents investing in the pound could have sought safer investment options represented by longer-term government bonds, which consequently could result in lower bond yields.

Keywords: Brexit; Financial markets; Macroeconomic indicators; Synthetic control method (search for similar items in EconPapers)
JEL-codes: C10 Q10 Q18 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10663-020-09481-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The Impact of the Brexit Vote on UK Financial Markets: A Synthetic Control Method Approach (2019)
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:kap:empiri:v:48:y:2021:i:2:d:10.1007_s10663-020-09481-7

Ordering information: This journal article can be ordered from
http://www.springer. ... ration/journal/10663

DOI: 10.1007/s10663-020-09481-7

Access Statistics for this article

Empirica is currently edited by Fritz Breuss and Fritz Breuss

More articles in Empirica from Springer, Austrian Institute for Economic Research, Austrian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().