Template-Type: ReDIF-Paper 1.0
Author-Name: Hang Do
Author-X-Name-First: Hang
Author-X-Name-Last: Do
Author-Email: h.do@soton.ac.uk
Author-Workplace-Name: University of Southampton
Author-Name: Kiet Duong
Author-X-Name-First: Kiet
Author-X-Name-Last: Duong
Author-Email: kiet.duong@york.ac.uk
Author-Workplace-Name: University of York
Author-Name: Toan Huynh
Author-X-Name-First: Toan
Author-X-Name-Last: Huynh
Author-Email: t.huynh@qmul.ac.uk
Author-Workplace-Name: Queen Mary University of London
Author-Name: Nam T. Vu
Author-X-Name-First: Nam
Author-X-Name-Last: Vu
Author-Email: vunt@miamioh.edu
Author-Workplace-Name: Miami University
Title: The Real Effects of Brexit on Labor Demand: Evidence from Firm-level Data
Abstract: Using the most comprehensive longitudinal survey on small and medium-sized businesses in the United Kingdom to date, we study how the actual implementation of Brexit in 2020 impacts their labor demand. Our identification strategy hinges on using the distance to the Irish border for firms that did not change location after the Referendum as a novel instrument to isolate the effects of Brexit at the firm level. We find that the 2020 implementation of Brexit caused exposed firms to cut their workforce by up to 16.5% on average. These exposed firms are also more likely to have lower growth expectations and more likely to increase their research and development (R&D) expenditure. Such results highlight the expectation channel and support the hypothesis that firms prioritize innovations in response to Brexit.
Length: 44 pages
Creation-Date: 2024-04
Revision-Date: 
Publication-Status: 
Classification-JEL: D25; D84; F16; O32
Keywords: Brexit; firm responses; technology; EU workers
File-URL: http://cgr.sbm.qmul.ac.uk/CGRWP117.pdf
Number: 117
Handle: RePEc:cgs:wpaper:117