The Implications of Brexit for UK and EU Regional Competitiveness

Mark Thissen, Frank Oort, Philip McCann, Raquel Ortega-Argilés and Trond Husby
Additional contact information
Mark Thissen: Netherlands Environmental Assessment Agency (PBL)
Philip McCann: Sheffield University
Raquel Ortega-Argilés: University of Birmingham
Trond Husby: Netherlands Environmental Assessment Agency (PBL)
Authors registered in the RePEc Author Service: Raquel Ortega Argilés

No 19-061/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Any form of Brexit will impact heterogeneously in terms of sectors and regions on the competitiveness of firms in both the UK and Europe. The ongoing uncertainty about the conditions under which the UK will be leaving the EU, creates difficulties in structurally estimating these impacts. Using uniquely-detailed interregional trade data on goods and services for the EU, we apply a novel methodology that disentangles region-sector sensitivities (elasticities) of firms’ competitiveness to (non)tariff barriers from the implications of different post-Brexit UK-EU trade scenarios. This enables us to derive the impact of Brexit on the competitiveness of firms along with the degree of uncertainty that surrounds these impacts, independently from the scenarios. Our analysis demonstrates that the adverse international competitiveness shocks on UK firms are much larger than those on the rest of the EU due to the dependency of the UK on the EU via global value chains. The competitiveness shocks mean that within the UK, Brexit is likely to increase both interregional inequalities and also intra-regional inequalities. In contrast interregional inequalities across Europe may actually fall, depending on the nature of the post-Brexit UK-EU trading arrangements.

Keywords: Brexit; competitiveness; impact analysis; international trade; regional economics; IO analysis (search for similar items in EconPapers)
JEL-codes: B27 P25 R13 (search for similar items in EconPapers)
Date: 2019-08-21
New Economics Papers: this item is included in nep-eec, nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://papers.tinbergen.nl/19061.pdf (application/pdf)

Related works:
Journal Article: The Implications of Brexit for UK and EU Regional Competitiveness (2020)
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:tin:wpaper:20190061

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().