Download This PaperA First Look at Brexit and Global Equity Markets
Applied Economics Letters, Forthcoming
Claremont McKenna College Robert Day School of Economics and Finance Research Paper No. 2925598
14 Pages Posted: 28 Feb 2017
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A First Look at Brexit and Global Equity Markets
A First Look at BREXIT and Global Equity Markets
Date Written: 2017
Abstract
Global equity markets fell by nearly 5% overall on June 24, 2016 following news of the Brexit referendum result. Although nearly all EU stock market indices experienced additional significantly negative abnormal returns, especially poor performance was registered by the debt-ridden PIIGS group (Portugal, Ireland, Italy, Greece, and Spain). In this paper we identify a systematic tendency for more severe stock market responses to be concentrated amongst countries with higher debt to GDP ratios. This effect endures even after controlling for the degree of openness, EU membership and for being part of the PIIGS group.
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Richard C. K. Burdekin (Contact Author)
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Eric N. Hughson
Claremont McKenna College - Robert Day School of Economics and Finance ( email )
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