UK Referendum Research Articles

Brexit and new perspectives of an unconventional way of Eurozone revival

Abstract In the aftermath of the UK referendum on June 23rd, 2016 that resulted in a sonorous negative decision regarding the willingness of the British people to remain in the EU, a significant number of alarming questions have emerged. Although Europe should have forged in crises, nowadays, many compromises have to be made in order to maintain the European construction as intact as possible. The question we attempt to answer is whether a new phase of unconventional monetary policy in the form of QE would be appropriate to lessen the threat of an upcoming crisis. This is why we examine Eurozone QE perspectives through the prism of the new EU era without the UK in order to highlight the pros and cons of the historical Brexit decision. As new rounds of unconventional monetary policy are believed to be essential for supporting the weaker countries in the European south, perspectives of non-conventional success could alter and optimal policies be substantially reformulated subject to the newly-arising constraints. Based on the main scenarios about the UK’s relations to the European Union in the near future, we estimate how a new round of non-conventional measures could affect the Britons as well as the European citizens. Moreover, we try to assess the viability of each of these outcomes through the spectrum of a monetary-driven decision-making.

Brexit and Westminster’s “Ulsterior Motives”

The chances are growing that an unexpected consequence of the 2016 UK referendum to exit the European Union (or “Brexit”) may eventuate in the unexpected development of Northern Ireland exiting the UK, or what might be termed “NIRexit.” In other words, Brexit may lead to Irish unification. The long-cherished dream of Irish nationalists for “a united Ireland” may therefore be the inadvertent consequence of the campaign to withdraw from the EU by the Brexiteers. Both demographics and economics are pushing Dublin and Belfast ever closer together. The increasing likelihood is that the attractions of remaining in the EU will be more important to Northern Irish citizens than age-old anxieties about joining the traditionally Catholic dominated Irish Republic. “Potatoes, not popes” may weigh more heavily than historical divisions between the Catholic south and the Irish north, especially because the Irish Republic is no longer dominated by the Catholic Church.

Legal Regulation of Campaign Deliberation: Lessons from Brexit

There has been significant attention paid to explaining and understanding the impact of the UK’s vote to leave the EU on UK politics and its constitution. There has also been criticism of the political campaigning, from both the “leave” and “remain” sides, and of people’s understanding of what they were voting for. There has been limited discussion, though, of how to improve the quality of campaign deliberation, which is fundamental to the legitimacy of both representative and direct democratic processes. Using the UK’s vote on EU membership as a case study, this article examines the importance of the law to regulate and improve deliberation prior to direct public votes on specific policy issues. It also considers options for changes to the law and for its implementation, using the current provisions about false statements in electoral law as a starting point. The article argues that the quality of deliberation during UK referendum campaigns needs to improve and that legal regulation should be developed. There are, however, significant challenges in drafting legislation that appropriately defines and limits the use of misleading statements, and at the same time avoids excessive restriction of free speech, or an excessively political role for regulatory bodies and the courts. Given the nature of political campaigning and the challenges in reducing the use of misleading statements by political actors through legal regulation, increased deliberative opportunities for citizens are proposed as a complementary, perhaps more effective means to positively enhance deliberation in political campaigns. Whatever approach is taken, direct democracy needs to be combined effectively with representative democracy, based on a common underlying principle of the importance of deliberation, and not treated as a separate part of a state’s democracy.

Did Brexit change the behaviour of the UK’s financial markets?

Abstract. The recent UK referendum results and subsequent initiation of Article 50 in the 2007 Lisbon Treaty set in motion the UK’s withdrawal from the European Union, acknowledge as Brexit. The result and subsequent action were unprecedented and for many unforeseeable. Apart from the political instability and division of the country, the complicated and long process of Brexit have both economic and financial consequences. With this in mind, we analyse the impact of Brexit on four main British financial markets: Equity, Foreign Exchange, Gold and Sovereign Debt; using daily data. We extendthe variance bound test proposed by Fakhry & Richter (2018) underpinned by an asymmetrical C-GARCH-m model of volatility. Unlike many in the past, we placed the emphasis on the stable markets; thus introducing the stable marketpre-condition hypothesis. We analyse the long and short run effects of Brexit on the stability of the UK’s financial market. Our results hint at a certain impact on the UK’s financial market in both the long and short runs on the market stability and hence efficiency. This seems to be dictated by the reaction of market participants to uncertainty surrounding the future of the UK Keywords. Volatility test, Asymmetrical C-GARCH-m, Financial markets, Brexit. JEL. C12, C58, D81, G01, G14, G15, G18, G40.

Brexit and the imaginary of ‘crisis’: a discourse-conceptual analysis of European news media

ABSTRACTThis article explores the discourse-conceptual linkages between ‘Brexit’ and ‘crisis’ in European news media reporting about the UK referendum on leaving the European Union of 23 June 2016. The study examines media discourse about the Brexit vote in Austria, Germany, Poland and Sweden at the transformative moment in between the pre/after vote period. The conceptually-oriented critical discourse analysis shows how Brexit was not only constructed as an imaginary or a future crisis but also how its mediated visions were made real by recontextualising elements of various past social/political/economic crises. As is shown, such a strategy of discursively amalgamating the real and the imaginary, as well as the experienced/past and the expected/future, often allowed constructing Brexit as one of the most significant, critical occurrences of post-War Europe. Through the analysis, the article aims to show how wide and diverse the importance of ‘Brexit as crisis’ has been for European news media discourse. It also emphasises that while in the UK itself – including huge part of the UK traditional media – the critical nature of Brexit was often strategically downplayed, the wider European discourse would see it as a multifaceted ‘crisis’ of huge significance to both the present and the future of the EU, wider Europe and the world.

Renegotiation Versus Brexit: The Question of the UK's Constitutional Relationship with the EU

AbstractThis article examines how the British public perceived UK Prime Minister David Cameron's plan to renegotiate his country's relationship with the EU. It asks whether attitudes towards renegotiation followed a similar pattern to attitudes towards Brexit. It asks: are preferences towards renegotiation and Brexit related, and did British citizens perceive them as conflicting or complementary? We modelled the similarities and differences between these two types of preferences, which allowed us to classify the attitudes into four patterns: unconditional europhiles, rejectionist eurosceptics, risk‐averse eurosceptics and power‐seeking eurosceptics. Using a large‐N cross‐sectional survey conducted in the UK in April 2015 (n = 3000), our findings suggest that similar utilitarian concerns underpinned both types of preferences; but education and partisan cues differentiated them. Our findings have implications for understanding the result of the UK referendum. They also highlight the complex considerations that drive citizens’ attitudes towards the EU and help us predict the scope of public acceptance of EU reform initiatives by other governments.

Europe in Fragments

In this autoethnographic response to Brexit, the author tries to make sense of feelings of profound loss following the UK referendum decision to leave the European Union. In exploring questions of what it is that has been lost, who ‘we’ are, and how we might recover, she traces key strands in her family, cultural, and professional life that highlight both points of division and points of connection with others (and with those doing ‘othering’), in our increasingly polarised and fragmented world. Stories she listened to in her professional capacity, told by politicians on the one hand and by those who had long felt excluded and ‘left behind’ on the other, take on a fresh significance in light of the decision to ‘leave’. In these uncertain and insecure times, one thing seems sure: Progress lies in connecting to others, reaching out, crossing borders, holding hands, healing wounds, re-creating community.

The effects of Brexit on credit spreads: Evidence from UK and Eurozone corporate bond markets

Using event-study techniques, we investigate the impact of Brexit-related events on the corporate bond yield spreads in the United Kingdom and Eurozone, respectively. We want to find out whether Brexit-related news, including the Brexit referendum itself, had an impact on the risk conditions in those two corporate bond markets. Our estimation results indicate that the announcement of the referendum result is associated with increasing credit spreads in the UK and EA. However, only the actual announcement of the UK referendum result itself had an influence on the credit spreads. Furthermore, we distinguish between the financial and the non-financial economic sectors in order to analyze more specific sector-related effects of the referendum event. Our estimation results suggest that UK credit spreads were more strongly influenced by the announcement of the results of the Brexit referendum than credit bond spreads in the Eurozone were. Finally, we split our sample into pre-referendum and post-referendum periods to consider the potential changing evaluation of the determinants of corporate bond spreads due to altering risk pricing triggered by the Brexit referendum result. We find that the effect of credit default risk is far stronger and plays a significant role in the post-referendum period in UK and EA, respectively.

Predicting referendum results in the Big Data Era

In addressing the challenge of Big Data Analytics, what has been of notable significance is the analysis of online search traffic data in order to analyze and predict human behavior. Over the last decade, since the establishment of the most popular such tool, Google Trends, the use of online data has been proven valuable in various research fields, including -but not limited to- medicine, economics, politics, the environment, and behavior. In the field of politics, given the inability of poll agencies to always well approximate voting intentions and results over the past years, what is imperative is to find new methods of predicting elections and referendum outcomes. This paper aims at presenting a methodology of predicting referendum results using Google Trends; a method applied and verified in six separate occasions: the 2014 Scottish Referendum, the 2015 Greek Referendum, the 2016 UK Referendum, the 2016 Hungarian Referendum, the 2016 Italian Referendum, and the 2017 Turkish Referendum. Said referendums were of importance for the respective country and the EU as well, and received wide international attention. Google Trends has been empirically verified to be a tool that can accurately measure behavioral changes as it takes into account the users’ revealed and not the stated preferences. Thus we argue that, in the time of intelligence excess, Google Trends can well address the analysis of social changes that the internet brings.

Trading Events: Smiles, Frowns and Moustaches – the Many Faces of the Options Market

Financial markets are becoming increasingly event driven. These can take the form of economic releases, speeches and elections. The arrival of this new information often causes the underlying asset to jump. Consequently, the expectation of these known announcements can produce significant distortions in option volatility surfaces. This presents a challenge, or opportunity, for pricing and risk management. We therefore undertake an examination of large events. Firstly, we perform an empirical analysis of the UK referendum in 2016. This is in order to give market practitioners intuition for these extreme scenarios and to guide us towards a quantitative approach. As a result, we introduce a new bimodal jump model. By varying the two jump parameters, we show how to parsimoniously produce the aforementioned smile distortions – specifically: skews, frowns and W-shapes. Furthermore, we demonstrate the model’s calibration to the observed volatility surface leading up to the referendum, and the French election in 2017. If jump parameters are frozen with time, the model can be used in the temporal volatility interpolation. Finally, we discuss how the jump probabilities are becoming increasingly observable via alternative data, such as betting markets, election polls and research reports.

Brexit in Sunderland: The production of difference and division in the UK referendum on European Union membership

There is a growing narrative that the outcome of the UK referendum on European Union membership was the product of disenfranchisement and disillusionment wrought by the uneven consequences of economic restructuring in different UK regions, cities and communities. Those most likely to vote ‘leave’ were concentrated among those ‘left behind’ by globalisation, whilst those voting ‘remain’ were clustered within more affluent areas and social groups. These uneven geographies of leave and remain voting have been taken to reveal two diametrically opposed groups in British politics, obscuring the messy and contradictory ways in which votes are cast. In seeking to bring these complexities to light, this paper explores the motivating factors behind the Brexit vote amongst older working-class white men in Sunderland, England. The paper shows how economic stagnation and the experience of different forms of marginality led to a nostalgia for times past and a mistrust of political elites amongst this cohort. The paper documents how the feelings expressed by research participants became linked to the European Union project and its real and perceived impacts on the local area. In doing so, it shows that the referendum shaped and changed the electorate by asking them to align themselves with those either for or against Britain’s membership of the EU. The paper concludes by reflecting on the possibilities for creating an inclusive form of politics that treats different responses to the referendum question as the basis for an open conversation about democracy and democratic ideals.

Resources, Values, Identity: Young Cosmopolitans and the Referendum on British Membership of the European Union

AbstractIn the aftermath of the global financial crisis, we have witnessed a resurgence in nationalism, Euroscepticism and populist politics in Europe and the United States. Young people have borne the brunt of this crisis. Yet, in the 2016 UK referendum, the vast majority of younger citizens voted for Britain to remain in the European Union. But why did they do so? Drawing upon a bespoke survey of 1351 18- to 30-year-olds, this article investigates the relative importance of socio-demographic factors, post-materialist values and primary self-identification. It finds that positive views about cultural diversity and being a full-time student were the greatest predictors of a young person voting Remain, whilst no significant association is found between higher educational attainment and voting Remain at the multivariate level. Setting the EU referendum within the broader context of youth politics, the article also identifies the existence of cosmopolitan values amongst young Remainers. This has major implications for both our understanding of the success of Jeremy Corbyn and the Labour Party amongst young voters in the 2017 general election, and the challenges the Conservative Party faces with regard to establishing support among Britain’s young cosmopolitans for future elections.

Brexit: Re‐opening Ireland's ‘English Question’

AbstractThe outcome of the UK referendum of June 2016 on the question of EU membership had and will continue to have a profound impact on Ireland, its membership of the EU and on British‐Irish relations, given the UK's choice of exit over voice. This paper analyses Brexit from the perspective of the island of Ireland. It adopts three analytic lenses: first, Brexit is analysed from a domestic Irish perspective; second, the negotiations between the EU and the UK and Ireland's position in these negotiations is analysed from a dynamic temporal perspective; third, the paper focuses on the all island dimension of Brexit and its implications for the Irish border. The Irish border will continue to play a pivotal role in the Brexit negotiations and will remain an unsettled issue long after the UK's exit.

Did Austerity Cause Brexit?

This paper documents a significant association between the exposure of an individual or area to the UK government’s austerity-induced welfare reforms begun in 2010, and the following: the subsequent rise in support for the UK Independence Party, an important correlate of Leave support in the 2016 UK referendum on European Union membership; broader individual-level measures of political dissatisfaction; and direct measures of support for Leave. Leveraging data from all UK electoral contests since 2000, along with detailed, individual-level panel data, the findings suggest that the EU referendum could have resulted in a Remain victory had it not been for austerity. (JEL D72, F15, F60, H53, I38)

A UK and Partisan view of Brexit and Dental Public Health.

I walked to work on 24th June 2016, reeling from the news that the UK referendum had shown a small but decisive majority in favour of leaving the European Union. I only knew of one person who had voted for Brexit! I had seen a few Leave posters up whilst out cycling and the opinion polls showed only a small difference, but none the less, I was hugely surprised. A neighbour reassured me that a deal would be struck so that we would fi nd a nice arrangement amounting to a modest change, but the last two years have shown the value of his insights.

After the UK Referendum. What next for the EU? Can Britain remain? Urgent need for EU reform from the ground up

After the UK Referendum. What next for the EU? Can Britain remain? Urgent need for EU reform from the ground up

Scotland as an optimal currency area

AbstractThe June 2016 UK referendum on continued EU membership where the people of Scotland voted to remain, while the rest of the United Kingdom voted to leave, once again makes the issue of whether Scotland is an optimal currency area very topical. England voted strongly to leave Europe while Scotland backed remain by 62% to 38%. The Scottish government published its draft bill on a second independence referendum in October 2016. The move does not mean another referendum will definitely be held, but this does raise the possibility that Scotland might choose independence and staying in the EU without the rest of the United Kingdom. If Scotland charts a course of independence from the rest of the United Kingdom, then they would likely either issue their own currency or join or form another currency area.In this paper, we test the microeconomic foundations of a common currency area for Scotland, United Kingdom, and the rest of the United Kingdom without Scotland. We find that the United Kingdom, Scotland, and the United Kingdom without Scotland all meet the microeconomic criteria for a common currency area. In contrast, banking data suggest that lending in Scotland is different from lending in the rest of the United Kingdom, adding some doubt to the issue of whether or not Scotland is a common currency area with the United Kingdom.

Immigration and Self-Reported Well-Being in the UK

Much recent research suggests that immigration has had little, if any, negative impact on the labour market outcomes of natives. In this study we focus on ascertaining the effect of immigration on subjective as opposed to objective indicators of native well-being. Our analytical approach exploits spatial and temporal variation in the net inflows of foreign-born individuals across local areas in England. We find using both a fixed effects and instrumental variable specification that net inflows of foreign-born individuals are associated with modest negative subjective well-being effects for the population as a whole, but that there is a notable degree of heterogeneity in this relationship. Specifically, relatively older individuals (60 ), those with below average household incomes, the unemployed and finally those without any formal educational qualifications experience much more pronounced well-being losses than their younger, financially better-off and employed counterparts. These observed well-being differentials across social groups are similar to voting patterns evident in the recent UK referendum on EU membership. We put forward perceived labour market competition as one of the mechanisms underpinning these results. In support of this premise, we find that the negative relationship between inflows of foreign-born individuals and the subjective well-being of the native-born population in England is much more substantive when macroeconomic conditions are relatively less favourable.

Rethinking “community” relationally: Polish communities in Scotland before and after Brexit

Community is a nebulous, contested concept in geography spanning research on social networks, encounters, mobilities, citizenship and belonging. However, its use as a discursive trope in public, policy and academic work points to continued relevance as an analytical category, particularly as meanings of community in Europe are being tested by Brexit. This paper combines diverse scholarship on the geographies of encounter, mobility and citizenship to revisit the concept of “community” using a relational lens. This is explored through an original empirical analysis of the community practices of Polish nationals in Scotland in the context of Brexit. Using biographical‐narrative data collected before and after the UK referendum on EU membership, the paper discusses three forms of community practised by Polish nationals: community centre, a cyber community and a community festival. I advance a relational perspective on community that overcomes spatially and temporally rigid dichotomies of communal experience, emphasising community as a dynamic, interconnected and power‐laden process involving multiple temporalities.

Brexit and Correlations of Equity Returns in France, Germany, Italy, Spain and the U.K.

This paper investigates whether the UK's referendum decision to leave the European Union (Brexit) had a positive impact on portfolio risk diversification. We estimate weekly dynamic conditional correlations between 1973 and 2018, and then optimal sectoral portfolio allocations over the same period. Our results show that correlations of equity returns increased as a consequence of economic integration among European countries from the mid-1980s until the late 2000s, and decreased in the UK after Black Wednesday and the Brexit referendum. We tested the existence of a correlation change-point on 27th June 2016 by applying Wied, Kraemer, and Dehling (2012)'s correlation structural break test, which we modified to account for dynamic conditional correlations. Application of this test confirms that the referendum date was a break-point in a third of UK manufacturing industries. The failure of Lehman Brothers and the 1987 stock market crash were also identified as structural breaks in equity correlations. Moreover, our findings suggest that the Brexit vote may constitute a long-term trend reversal of the convergence of equity return correlations in European markets, akin to Black Wednesday, rather than a shock like the 1987 and 2008 financial crises, which merely intensified the historical upward trend in correlations of European equity returns.