EU views and household investments: evidence from the Brexit referendum

Michele Cascarano, Laura Sigalotti () and Francesco Stradi ()
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Laura Sigalotti: Bank of Italy
Francesco Stradi: KU Leuven

No 1504, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This study investigates how Euroscepticism affected the portfolio choices of Italian retail investors following the Brexit referendum. Using granular investment data, we show that residents of Eurosceptic provinces significantly increased their allocations to UK securities after Brexit (relative to residents of pro-European provinces), suggesting that Eurosceptic investors perceived Brexit as a positive event for UK prospects. Robustness checks show that the results are not driven by potential demographic, geographic, or economic confounders, nor by banks' advice or broader geographic portfolio rebalancing. Our findings highlight how polarization in political beliefs, when coupled with pivotal geopolitical events, can influence international investment decisions.

Keywords: behavioral finance; investments; euroscepticism; household finance; geopolitics (search for similar items in EconPapers)
JEL-codes: D14 G11 G41 (search for similar items in EconPapers)
Date: 2025-11
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1504_25

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