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

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)58-76
Number of pages19
JournalJournal of Banking and Finance
Early online date30 Dec 2018
DateAccepted/In press - 28 Dec 2018
DateE-pub ahead of print - 30 Dec 2018
DatePublished (current) - Mar 2019


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.

    Research areas

  • Brexit, Political uncertainty, U.K



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    Embargo ends: 30/06/20

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    Licence: CC BY-NC-ND


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