Export-platform FDI and Brexit Uncertainty

Nicolo Tamberi

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: This paper analyses the effect of Brexit uncertainty on export-platform FDI in the United Kingdom. First, I develop a partial equilibrium framework with heterogeneous firms that involves the trade policy uncertainty about access to the EU. Second, I derive a difference in differences equation that I test empirically using data on manufacturing FDI up to 2018. Results show that trade policy uncertainty negatively impacted on firms' decision to invest in export-platform activities in the UK, and there is some evidence that firms preferred to locate in the continent. I estimate the effect of trade policy uncertainty as a reduction of around 13.5% export-platform FDI projects.

Date: 2020-01
New Economics Papers: this item is included in nep-eur and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:sus:susewp:0320

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