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Brexit Calling! Aftermath in the Pharmaceutical Industry

Haritini Tsangari


Ioanna Mantara

Haritini Tsangari 1

Ioanna Mantara 2

  1. Professor, School of Business, University of Nicosia, Cyprus. 1

  2. School of Business, University of Nicosia, Cyprus. 2

Pages: 70-80

DOI: 10.18488/journal.62.2021.82.70.80

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Article History:

Received: 03 September, 2020
Revised: 19 October, 2020
Accepted: 12 November, 2020
Published: 27 November, 2020


This paper aims to examine the impact of the Brexit referendum on the financial performance of the pharmaceutical industry in the United Kingdom. We analyze daily data for the period 1/2000-10/2019, for the two largest British pharmaceutical firms, GlaxoSmithKline and AstraZeneca, as well as two European competitors, the Swiss Novartis and the German Bayer. We perform returns and volatility analysis, financial ratio analysis and regression analysis. Our empirical results are heterogeneous among firms, pinpointing strengths and weaknesses of the pharmaceutical firms. The Brexit decision has had a significant, positive effect on the stock returns of the two British firms, a negative effect for Bayer and no effect for Novartis, while lagged returns are significant only for the European firms. At least in the short-run, both British firms have gained considerably from the depreciation of the sterling and should aim to expand their overseas network and avoid prospective trade barriers and regulatory issues.
Contribution/ Originality
This study contributes to the existing literature by examining the effect of the Brexit decision on a highly profitable sector, looking at the consequences from many different perspectives, employing various statistical techniques and focusing not only on the pharmaceutical companies in the United Kingdom, but their competitors as well.


Brexit, Pharmaceutical industry, Stock returns, Volatility, Random walk hypothesis, Efficient market, Behavioral finance, Financial ratio analysis, Trade barriers.


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This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


Both authors contributed equally to the conception and design of the study.

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