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

Author

Listed:
  • Enrico Vanino

  • Mustapha Douch
  • Ismail Çakmak

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.

Suggested Citation

  • Enrico Vanino & Mustapha Douch & Ismail Çakmak, 2026. "Political, economic and research disintegration: the impact of geopolitical uncertainty on cross-border R&D collaborations and innovation," Bank of Estonia Working Papers wp2026-04, Bank of Estonia, revised 01 Jun 2026.
    • Handle: RePEc:eea:boewps:wp2026-04
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    File URL: http://www.bankofestonia.info/pub/en/dokumendid/publikatsioonid/seeriad/uuringud//https://haldus.eestipank.ee/sites/default/files/2026-04/wp4_2026w.pdf
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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O36 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Open Innovation
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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