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Brexit Spillovers through International Trade and Foreign Investment: Empirical Evidence from EU-27 and the UK

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In this paper, the authors examined the Brexit spillovers upon the European Union Member States (MS) (EU-27) and the UK through two fundamental freedoms of regional integration: goods and services (international trade), and capital (foreign investment, FDI).
Abstract
This study examines the Brexit spillovers upon the European Union Member States (MS) (EU-27) and the UK through two fundamental freedoms of regional integration: goods and services (international trade), and capital (foreign investment, FDI). We have applied cluster analysis and structural equation modelling on a strongly balanced panel of EU-27 and the UK. Both techniques explore two scenarios that focus on the performances achieved by the EU-MS in terms of GDP per capita and GDP growth, under the impact of trade and FDI, before and after the Brexit (1995-2019 and 2020-2025 periods). Our results show that the UK’s economy will be affected both related to GDP growth and GDP per capita levels, particularly on the short run. The EU-27 impact largely differs across countries and types of international activities, being decisively influenced through the FDI relations. Overall, the spillovers induced by international flows are positive, but significantly diminished after the Brexit. Key words: Brexit, Trade, Foreign direct investment, Econometric procedures, European Union. JEL: F15, F21, F43, F47.

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Foreign Direct Investment and Trade—Between Complementarity and Substitution. Evidence from European Union Countries

TL;DR: In this paper, the relationship between FDI and foreign trade is investigated using a Granger causality technique, and the results indicate that this relationship appears to be complementary, and FDI investment does cause an increase in trade flow in the countries that are taken into consideration.
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Brexit and Indirect Impact Routes through Global Value Chains

TL;DR: In this paper, the authors analyzed the trade linkages between the United Kingdom (UK), Finland, and the European Union (EU), and calculated the value-added content of trade through complex global value chains.
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Journal ArticleDOI

Exports and economic growth: Further evidence

TL;DR: In this article, the relationship between exports and economic growth in 11 developing countries that have already established an industrial base was analyzed, adjusting for domestic and foreign investment and for increases in the labor force that affect total exports.
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A model of innovation, technology transfer, and the world distribution of income

TL;DR: In this article, the authors developed a simple general-equilibrium model of product cycle trade, where there are two countries, innovating North and non-innovating South, each of which can produce new products at first only in North, but eventually the technology of production becomes available to South.
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