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

Enrico Vanino (), Mustapha Douch and Ismail Çakmak

No wp2026-04, Bank of Estonia Working Papers from Bank of Estonia

Abstract: Uncertainty regarding the policy environment could be particularly detrimental to 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’s exit from the EU as a quasi-natural experiment in a difference-in-differences (DiD) analysis. Our results reveal a significant disruption to the cross-border research collaborations of UK organisations after the Brexit referendum, as EU-based inventors were replaced by UK-based ones. Overall, this disruption has negatively affected the innovation output of UK-based organisations, reducing both the number of inventions patented overseas and their quality.

JEL-codes: D80 F15 O30 O34 O36 (search for similar items in EconPapers)
Date: 2026-06-01, Revised 2026-06-01
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