Crowley, M. A., Exton, O. and Han, L.

The Looming Threat of Tariff Hikes: Entry into Exporting under Trade Agreement Renegotiation

AEA Papers and Proceedings

Vol. 110 pp. 547-51 (2020)

Abstract: We examine how the looming threat of tariff hikes under a trade agreement renegotiation impacts firm entry into a trading partner's market by exploiting uncertainty over the future UK-EU trade relationship brought about by the June 2016 Brexit referendum. Using the universe of UK export transactions at the firm and product level, we find that uncertainty over future market access to the EU deterred entry modestly in the months immediately after the Brexit vote, but the deterrent effect increased over time.

Keywords: Economic Integration, Empirical Studies of Trade, International Trade Organizations, Trade Policy

JEL Codes: F13, F14, F15

Author links: Meredith Crowley  

Publisher's Link: https://doi.org/10.1257/pandp.20201020

Grant: Brexit Project