Brexsea Trade and Uncertainty: Impact of Brexit on Seafood Exports

This paper investigates the effect of the Brexit referendum on Norwegian firms' exports of fresh seafood to the United Kingdom. We exploit the referendum as a quasi-natural experiment to investigate the effect of an uncertainty shock in trade on export values, volumes, and prices, as well as market entry and exit. First, we find that Norwegian firms experienced an average 2% decrease in total export value resulting from the referendum, suggesting a limited aggregate effect. Second, we examine the role of duration in firm-to-firm relationships in response to the shock, finding that more established relationships responded relatively more along the intensive margin to the shock. Third, the market dynamic post-referendum reveals a nuanced impact; while new market entries were limited, a slight increase in exit probabilities was observed. This reflects a strategic response by Norwegian exporters to the shock, particularly amongst firms with an established export history, indicating a reassessment of market presence. Overall, Norwegian exporters have demonstrated resilience and adaptability, effectively adjusting to the challenges of the Brexit referendum with minimal disruptions while maintaining their international trade relations amidst short-term uncertainties.