Political, economic and research disintegration: The impact of geopolitical uncertainty on cross-border R&D collaborations and innovation

Enrico Vanino (), Mustapha Douch () and Ismail Cakmak ()
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Enrico Vanino: School of Economics, University of Sheffield, Sheffield S1 4DT, UK
Mustapha Douch: University of Edinburgh, Business School, UK
Ismail Cakmak: Ordu University, Dept. of Management and Organization, Turkey

No 2025003, Working Papers from The University of Sheffield, Department of Economics

Abstract: Uncertainty regarding the policy environment could be particularly detrimental for innovation, as it requires high-risk investment, and long-term commitments with scientists and research partners. This paper focuses on the effects of geopolitical uncertainty on cross-border R&D collaborations and patenting activity, exploiting the UK exit from the EU as a quasi-natural experiment in a Difference-in-Difference (DiD) analysis. Our results reveal a significant disruption in cross-border research collaborations of UK organisations after the Brexit referendum, as EU based inventors were replaced by UK ones. This has resulted in a shift in the field of technologies patented, and in a decrease in inventions patented overseas. Overall, the disruption has negatively affected the innovations of UK based organisations, reducing both the number and quality of patents.

Keywords: Economic policy uncertainty; Brexit; Innovation; Patents; International research collaborations (search for similar items in EconPapers)
JEL-codes: D80 F15 O30 O34 O36 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2025-03
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