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
Date Written: March 1, 2018
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
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