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The impact of the Brexit referendum on UK’s value-added exports: A structural decomposition

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  • Feás, Enrique
Abstract
This article uses for the first time inter-country input–output data and a structural decomposition method to assess the impact of the 2016 Brexit referendum on the United Kingdom’s value-added exports. We find that final demand explains less than 30% of the 6.9-point decline in the UK’s value-added exports in 2016 (with a market share loss that offset the positive impact of global demand), whereas more than 70% was due to extraordinary changes in input sourcing decisions of the rest of the world. This means that the UK’s value-added exports were structurally affected by the weakening of the linkage effects of providing inputs to the rest of the world, especially to the EU. This article paves the way for further analyses of the structural effects of Brexit and other trade and industrial policies that alter the international allocation of inputs.

Suggested Citation

  • Feás, Enrique, 2023. "The impact of the Brexit referendum on UK’s value-added exports: A structural decomposition," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1239-1254.
    • Handle: RePEc:eee:ecanpo:v:80:y:2023:i:c:p:1239-1254
    DOI: 10.1016/j.eap.2023.10.007
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    More about this item

    Keywords

    Global value chains; Value-added exports; Input–output tables; Trade in value-added; Brexit; European Union;
    All these keywords.

    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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