DOES BREXIT MATTER FOR FIRMS’ INNOVATION?

Flavio Pichler () and Stefano Piserã€
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Flavio Pichler: University of Verona, Italy
Stefano Piserã€: ��University of Genoa, Italy

Journal of Financial Management, Markets and Institutions (JFMMI), 2024, vol. 12, issue 01, 1-17

Abstract: Investigating the effects of Brexit on firms’ innovation behavior is pivotal to understand future possible economic growth and welfare effects of such policy decisions in the UK. By applying a difference-in-difference (DID) methodology on a sample of 2846 firm-year observations from 2013 to 2018, we address this question observing a decrease in UK firms’ research and development expenses compared to European firms. Specifically, we observe an R&D decrease of UK firms of about 10%, and of about 1.3% compared to EU firms. Our results offer important evidence for policymakers and UK regulators, warning on the future detrimental impact of Brexit on UK firms’ innovation policies.

Keywords: R&D; Brexit; difference-in-difference; innovation (search for similar items in EconPapers)
JEL-codes: G3 G30 G32 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2282717X23500123

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