Crowley, M. A., Han, L., Son, M.
The Swift Decline of the British Pound: Evidence from UK Trade-invoicing after the Brexit Vote
JIWP Number: 2407
Abstract: Using administrative transactions data from the United Kingdom, we document a swift decline in sterling use among British exporters after the 2016 Brexit vote. Through a novel decomposition, we document most of this decline comes from two sources: (i) continuously-operating firms switching from sterling to dollars or local currencies and (ii) reductions in transactions for sterling-loyal firms. In contrast, new entrants into exporting primarily invoice in sterling before and after the Brexit vote. Our findings provide the first evidence on the quantitative relevance of new channels that contribute to changes in aggregate invoicing shares amidst political upheaval.
Keywords: Brexit, Invoicing Currency, Sterling, Trade Transactions
JEL Codes: F14 F31 F41
Author links: Meredith Crowley
PDF: jiwp2407.pdf 
Open Access Link: 10.17863/CAM.107460
