What Happens If the Rules Change? The Impact of Brexit on the Future Strategic Intentions of UK SMEs

34 Pages Posted: 9 Nov 2017 Last revised: 4 Mar 2018

See all articles by Ross Brown

Ross Brown

University of St Andrews

José Manuel Liñares-Zegarra

University of Essex - Essex Business School

John O. S. Wilson

University of St. Andrews

Date Written: March 1, 2018

Abstract

The UK vote to leave the European Union (Brexit) in June 2016, was an unparalleled political event with potentially seismic consequences for the economy. Using data from a UK government survey of approximately 10,000 SMEs, this paper investigates which SMEs are most concerned by Brexit and the likely impact of this event on their (self-reported) strategic future intentions related to accessing finance, growth, innovation and capital expenditure. The results of a descriptive analysis suggest that larger, innovative, export-oriented SMEs and those operating in business services perceive Brexit as a major obstacle to the success of their business. The results of a regression based analysis suggest Brexit could potentially result in weaker growth, lower levels of innovation, reduced capital investment and lower access to external finance, especially for innovative and export-oriented SMEs. Importantly, Brexit may have the most significant negative repercussions for the SMEs often viewed as the largest contributors to long-term productivity growth.

Keywords: Brexit, SMEs, Uncertainty, Entrepreneurship, Investment, Public Policy

Suggested Citation

Brown, Ross and Linares-Zegarra, Jose Manuel and Wilson, John O. S., What Happens If the Rules Change? The Impact of Brexit on the Future Strategic Intentions of UK SMEs (March 1, 2018). Available at SSRN: https://ssrn.com/abstract=3066614 or http://dx.doi.org/10.2139/ssrn.3066614

Ross Brown (Contact Author)

University of St Andrews ( email )

The Gateway
North Haugh
St Andrews, KY16 9RJ
United Kingdom

HOME PAGE: http://https://www.st-andrews.ac.uk/

Jose Manuel Linares-Zegarra

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=4474

John O. S. Wilson

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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