Exporters and shocks: Impact of the Brexit vote shock on bilateral exports to the UK

This paper exploits the Brexit referendum as a quasi-natural experiment to investigate the effect of exchange rate and uncertainty shocks on export volumes, prices, entry and exit. The authors use transaction-level export data for the universe of exporters in Portugal. Using monthly observations on export quantity and price for products exported by the same firm to buyers in the UK and in other countries they cleanly identify the differential response to the shock in the UK market. They find that exporters reduce the export volume and export price in the UK market after the referendum shock. They document heterogeneous responses to the shock across exporters. The referendum shock also contributed to deter export entry to the UK market and reduce the probability of continuing to export in the UK.

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