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Regional trade vulnerability in the UK - a study on the industrial impact of Brexit

Wallin Bernhardsson, Niklas LU (2017) NEKP01 20171
Department of Economics
Abstract
The decision by the United Kingdom to exit the European Union will have significant repercussions for the global economy. The consequences of Brexit have been studied through different perspectives and methods, however there is a lack in the literature in using a regional perspective. This study thus aims to fill this gap by estimating the industrial impact of Brexit on the United Kingdom through a regional perspective. The study assumes that the Brexit negotiations will result in a situation where in the UK and EU trade under the WTO rules for “most-favoured-nation”. Regional trade volumes of imports and exports to the EU are calculated at the industry-level and combined with data over tariffs and non-tariff barriers. This is performed to... (More)
The decision by the United Kingdom to exit the European Union will have significant repercussions for the global economy. The consequences of Brexit have been studied through different perspectives and methods, however there is a lack in the literature in using a regional perspective. This study thus aims to fill this gap by estimating the industrial impact of Brexit on the United Kingdom through a regional perspective. The study assumes that the Brexit negotiations will result in a situation where in the UK and EU trade under the WTO rules for “most-favoured-nation”. Regional trade volumes of imports and exports to the EU are calculated at the industry-level and combined with data over tariffs and non-tariff barriers. This is performed to obtain an estimation of total trade costs for each region in the UK. Furthermore, the regional labour market’s exposure to Brexit is analysed and included in the overall estimation of regional trade vulnerability. The assessment of the trade impact is measured in a static form through a constructed index over Regional Trade Vulnerability (RTV-index). The results show great regional differences of EU dependency where the most affected regions are South East, London and East, whilst Northern Ireland, South West and Wales are the least affected regions. The vast regional differences in magnitude of trade vulnerability emphasize the necessity for policy-makers to have this in consideration both in Brexit negotiations with the EU and for domestic policies. (Less)
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author
Wallin Bernhardsson, Niklas LU
supervisor
organization
course
NEKP01 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Trade shock, Regional trade vulnerability, Brexit, Industry impact
language
English
id
8905651
date added to LUP
2017-05-08 09:17:02
date last changed
2017-05-08 09:17:02
@misc{8905651,
  abstract     = {The decision by the United Kingdom to exit the European Union will have significant repercussions for the global economy. The consequences of Brexit have been studied through different perspectives and methods, however there is a lack in the literature in using a regional perspective. This study thus aims to fill this gap by estimating the industrial impact of Brexit on the United Kingdom through a regional perspective. The study assumes that the Brexit negotiations will result in a situation where in the UK and EU trade under the WTO rules for “most-favoured-nation”. Regional trade volumes of imports and exports to the EU are calculated at the industry-level and combined with data over tariffs and non-tariff barriers. This is performed to obtain an estimation of total trade costs for each region in the UK. Furthermore, the regional labour market’s exposure to Brexit is analysed and included in the overall estimation of regional trade vulnerability. The assessment of the trade impact is measured in a static form through a constructed index over Regional Trade Vulnerability (RTV-index). The results show great regional differences of EU dependency where the most affected regions are South East, London and East, whilst Northern Ireland, South West and Wales are the least affected regions. The vast regional differences in magnitude of trade vulnerability emphasize the necessity for policy-makers to have this in consideration both in Brexit negotiations with the EU and for domestic policies.},
  author       = {Wallin Bernhardsson, Niklas},
  keyword      = {Trade shock,Regional trade vulnerability,Brexit,Industry impact},
  language     = {eng},
  note         = {Student Paper},
  title        = {Regional trade vulnerability in the UK - a study on the industrial impact of Brexit},
  year         = {2017},
}