Brexit and the location of Japanese direct investment in European regions. (January 2021)

• Record Type: Journal Article
• Authors: Cieślik, Andrzej; Ryan, Michael
• Other Names: Henry Nick guest-editor.; Smith Adrian guest-editor.
• Is Part Of: European urban and regional studies. Volume 28:Number 1(2021)
• Page Start: 66
• Page End: 73
• Publication Date: 2021-01
• Subjects: Brexit -- Japanese direct investment -- NUTS-2 regions -- uncertainty; Regional planning -- Europe -- Periodicals; Regional economics -- Periodicals; Cities and towns -- Europe -- Periodicals; 307.76094
• DOI: 10.1177/0969776420970617
• Languages: English
• ISSNs: 0969-7764

Abstract

This paper investigates how the Brexit announcement affects Japanese direct investment into Europe at the regional NUTS-2 level. Political and economic uncertainty is an important factor affecting the economic performance of a country and its regions. In this study, Japanese annual firm-level data between the years 2000 and 2018 for 31 European countries is used. Negative binomial estimations indicate a significant negative relationship between uncertainty associated with the Brexit announcement and Japanese foreign direct investment (FDI) in the UK regions. Strong FDI path dependence currently acts to dampen this effect. However, depending upon future European Union Single Market access rules, such path dependence could act to magnify Brexit's effect on inward-UK FDI. JEL Classification Codes: F23, R12.