Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 34 n° 316

Expert comment on impact of Brexit on Foreign Direct Investment

Posted by fidest press agency su sabato, 25 giugno 2016

warwick_campus_2_largeNigel Driffield, of Warwick Business School, has researched the question. Professor Nigel Driffield said: “Our research has found Brexit would greatly reduce the level of foreign direct investment to the UK and for those people who think there might be just a short-term ‘blip’ we have found it will take four years to recover and even then the long-term trajectory will be lower.“EU membership has made inward investment more stable and has increased the long-term trend for the UK, so leaving would make the country less attractive for non-EU investors.”Plus the uncertainty over being in a club where others write the rules, and the uncertainty over access to markets would dominate, and we would remain on a lower long-term trend.”Some argue that with the likely devaluation of sterling following Brexit, small UK exporters may be better able to export, not just to the EU but to the rest of the world. This, however, depends on whether the devaluation also increases their costs, given that 50% of the UK’s exports rely on imported components.”In order to understand the impact that Brexit will have on UK manufacturing, one has to think not in terms of ‘this firm’ or ‘that firm’ but in terms of supply chains, that cross not just countries, but continents. “Many of the most important value chains in terms of UK manufacturing are highly integrated across several European countries. As a result many UK firms and their suppliers are at risk of being less attractive partners in these chains if trade between the UK and the EU becomes more difficult. “This means not just trade costs, but the ease of co-ordinating activities, which is why big business likes trade blocs.”


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