Political uncertainty exposure of individual companies: The case of the Brexit referendum

Paula Hill, Adriana Korczak, Piotr Korczak*

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

23 Citations (Scopus)
187 Downloads (Pure)


This paper studies cross-sectional determinants of the exposure of U.K. firms to Brexit, an event which resulted in an unprecedented rise in political uncertainty. We find that internationalization has a moderating effect on Brexit exposure which goes beyond the pure currency translation effect and is consistent with international activities acting as a diversification mechanism for domestic risks. We also provide some indicative evidence that high-growth firms are more affected by Brexit. At the industry level, we show that Financials and firms in the consumer-facing sectors have the highest exposure to Brexit-related uncertainty. Knowledge of the variation in exposure of individual firms and sectors to political uncertainty associated with major political events can assist managers, investors and policymakers in taking remedial actions to limit its impact.

Original languageEnglish
Pages (from-to)58-76
Number of pages19
JournalJournal of Banking and Finance
Early online date30 Dec 2018
Publication statusPublished - 1 Mar 2019

Structured keywords

  • AF Financial Markets
  • AF Corporate Finance


  • Brexit
  • Political uncertainty
  • U.K


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