The Impact of Political Uncertainty on Asset Prices: The Case of the United Kingdom's EU Membership Referendum

2021 ◽  
Author(s):  
Joseph Hanna ◽  
Niels-Jakob Hansen ◽  
Margaux MacDonald
Keyword(s):  
Asset Prices ◽  
Political Uncertainty ◽  
Eu Membership ◽  
The Impact

scholarly journals The Impact of Political Uncertainty on Asset Prices

2021 ◽  
Vol 21 (27) ◽  
Author(s):  
Joseph Hanna ◽  
Niels-Jakob Hansen ◽  
Margaux MacDonald
Keyword(s):  
Financial Markets ◽  
High Frequency ◽  
High Frequency Data ◽  
Frequency Data ◽  
Political Uncertainty ◽  
Differential Impact ◽  
Percentage Point Increase ◽  
Eu Membership ◽  
Point Increase ◽  
The Impact

How did expectations of the outcome of the United Kingdom's (UK) referendum on European Union (EU) membership in 2016 affect prices in financial markets? We study this using high frequency data from betting and financial markets. We find that a one percentage point increase in the probability of "Leave" result caused British stocks (FTSE All-Share) to decline by 0.004 percent, and the Pound to depreciate by 0.006 percent against the euro. We find negative and significant effects for most sub-sectors, and negative spill-overs to other EU member countries. We show that the differential impact across sectors and countries can be explained by differences in the trade exposures.

scholarly journals Determinants of Individual Support for Independence: Evidence from Montenegro

2021 ◽  
pp. 1-20
Author(s):  
Pëllumb Kelmendi ◽  
Christian Pedraza
Keyword(s):  
Individual Preference ◽  
Minority Rights ◽  
Relative Effect ◽  
Factors Associated ◽  
Eu Integration ◽  
Eu Membership ◽  
Individual Support ◽  
Nationally Representative ◽  
Democratic Principles ◽  
The Impact

Abstract This article investigates the determinants of individual support for independence in Montenegro. We outline five theoretically distinct groups of factors covered by the literature and evaluate their impact on individual preference for independence. Using observational data obtained from a nationally representative survey conducted in Montenegro in 2003–2004, we find support for several hypotheses, showing that identity, income, and partisanship significantly impact individual opinion about independence. We also investigate and discuss the relative effect size of different factors associated with preference for independence. Additionally, we test variables with hitherto unexplored implications for opinions on independence, including the impact of support for EU membership, as well as support for democratic principles. Our logistic regression analyses reveal that attitudes towards EU integration and minority rights are strongly associated with support for independence. By systematically analyzing existing and new hypotheses with data from an understudied case, our findings contribute to the nascent literature on individual preferences for independence.

scholarly journals Spillover Effect of Global Financial Cycle To Asset Markets in Asean-5 Countries: A Structural VAR Approach

2018 ◽  
Vol 2 (02) ◽  
pp. 1
Author(s):  
Sri Andaiyani ◽  
Telisa Aulia Falianty
Keyword(s):  
Risk Aversion ◽  
Capital Flows ◽  
Asset Prices ◽  
Emerging Market ◽  
Structural Var ◽  
Asset Markets ◽  
Equity Prices ◽  
Financial Cycle ◽  
Property Prices ◽  
The Impact

<p><em>An upsurge and volatility of capital flows to Emerging Asian Economies indicated that there is the potential effect of global financial cycle to emerging market. It provides an overview of investor risk aversion in short term investment after financial crisis 2008. Global financial cycle could have a significant impact to asset prices, including equity prices and property prices. Rey (2015) has triggered an interesting discussion about global financial cycle. She found that there was a global financial cycle in capital flows, asset prices and credit growth. This cycle was co</em><em>‐</em><em>moves with the VIX, a measure of uncertainty and risk aversion of the markets. Therefore, this study attempts to analyze empirically global financial cycle shocks, measured by the VIX, on equity prices and property prices in ASEAN-5, namely Indonesia, Malaysia, Singapore, Thailand and Philippines. We estimate quarterly frequency data from Q1 1990 to Q2 2016 with Structural Vector Autoregressive (SVAR) approach. The result of this study showed that global financial cycle has a negative significant impact on the ASEAN-5 asset markets, in spite of the response of shock differs by country and size. This result is consistent with ASEAN-5 as small open economies that remain vulnerable to the global factor. This study contributes to the literature in several ways. First, we identify not only cyclical expansions or contraction in asset markets but also the impact of global financial cycle to asset markets in ASEAN-5 countries. Second, we investigate whether there are heterogeneous responses of ASEAN-5 countries to global financial cycle shocks. Third, we also identify the pattern of cycle in ASEAN-5 countries</em>.</p><p><strong><em>J</em></strong><strong><em>EL Classification: </em></strong>F30, F37, F42</p><strong><em>Keywords: </em></strong><em>ASEAN, Asset Markets, Global Financial Cycle, SVAR</em>

scholarly journals FDI determinants in Europe and Chinese influence

2021 ◽  
Vol 16 (1) ◽  
pp. 21-37
Author(s):  
Alena Dorakh
Keyword(s):  
Trade Costs ◽  
The European Union ◽  
Western Balkans ◽  
Eu Member States ◽  
Eu Membership ◽  
Vertical Fdi ◽  
Belt And Road ◽  
The Cost ◽  
The Impact ◽  
The Eu

Despite recent concerns about the increasing influence of outside investors on the European Union (EU) and Western Balkans, the developed European countries are still a dominant source of foreign direct investment (FDI) in the region, confirming the benefits of EU membership. At the same time, fast-growing connectivity and lower trade costs in accession and neighboring countries determine the FDI growth from China, particularly via the Belt and Road Initiative (BRI). By applying panel data over 2000-2019 for 34 countries, which form 89% of all European FDI, we first examine FDI patterns around Europe, compare the EU, NMS, and Western Balkans; verify the importance of EU membership for FDI, caused reducing trade costs and improving connectivity. Thus, the new EU member states (NMS) and Western Balkans appear both as a home country and as a pre- entry destination to the EU. Then, we calculate trade costs indices for each selected country and partners over time and find that Europe and China are closely interconnected through trade and FDI. It means that stronger ties with China can be realized for the sample countries at the cost of easing relations with the EU. Finally, incorporating trade costs indices into the FDI model; we evaluate the impact of connectivity on FDI and estimate how BRI affected FDI in Europe. Additionally, we validate that the old framework of horizontal and vertical FDI not representative well and even new complex vertical or export-oriented FDI strategies are shifting today.

3. France: Genuine Europeanization or Monnet for Nothing?

2012 ◽  
Author(s):  
Olivier Rozenberg
Keyword(s):  
Public Policy ◽  
Large Body ◽  
Political Life ◽  
The European Union ◽  
National Narratives ◽  
French Politics ◽  
Eu Membership ◽  
Institutional System ◽  
The Impact ◽  
The Eu

This chapter examines France’s paradoxical relationship with the European Union by focusing on the heterogeneity of adaptation to the EU. While public policy and legislation are becoming increasingly Europeanized, the EU has a limited impact on political life and the domestic institutional system. As a result of this mixed situation, the national narratives for supporting French membership of the EU suffer from progressive erosion and Euroscepticism subtly gaining ground. The chapter first considers patterns in France’s EU membership before discussing the impact of EU membership on public opinion and political parties. It then looks at the Europeanization of French politics and the impact of EU membership on French institutions as well as public policy. The chapter argues that France has changed by joining the EU, contrary to what a large body of recent work suggests.

6. The relationship between EU and national law

2020 ◽  
pp. 154-178
Author(s):  
Sylvia de Mars
Keyword(s):  
National Court ◽  
Legal Order ◽  
Eu Law ◽  
The European Union ◽  
Eu Membership ◽  
Parliamentary Sovereignty ◽  
Domestic Courts ◽  
The Uk ◽  
The Impact ◽  
The Relationship

This chapter focuses on the relationship between EU law and national law. It first explores the jurisprudence on what is known as the doctrine of supremacy of EU law of the Court of Justice of the European Union (CJEU). When a national court observes that a national law clashes with an EU law, they must set aside that national law. The EU legal order would not work without a doctrine like supremacy: not only would domestic courts not be compelled to apply EU law instead of conflicting national law, but it is likely that different domestic courts would take different decisions as to whether to apply EU law over national law in a given scenario. The chapter then considers how supremacy has been received in Germany and the UK, looking at how the German and UK legal orders interact with EU law. It then addresses whether ‘parliamentary sovereignty’ is compatible with EU membership, and examines the impact of Brexit on the supremacy of EU law.

scholarly journals The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence

2020 ◽  
Vol 13 (2) ◽  
pp. 26
Author(s):  
Ivana Brkić ◽  
Nikola Gradojević ◽  
Svetlana Ignjatijević
Keyword(s):  
Economic Growth ◽  
Economic Freedom ◽  
Negative Impact ◽  
Developed Countries ◽  
Dynamic Panel ◽  
Heritage Foundation ◽  
Eu Membership ◽  
Time Period ◽  
European Economies ◽  
The Impact

This paper analyzes the impact of economic freedom along with traditional economic factors on economic growth for a panel of European countries. The growth of the gross domestic product was observed over a twenty-year time period on a sample of 43 developing and developed countries. Based on a robust dynamic panel setting, we conclude that increases in economic freedom as expressed by the Index of Economic Freedom/Heritage Foundation (but not its levels) are related to economic growth. The EU membership status either had no effect or it curbed the effect of the economic freedom on growth. We also find that the subprime economic crisis of 2008–2009 exerted a negative impact on the growth of European economies.

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