International Business and Entrepreneurship Implications of Brexit
| Published date | 01 October 2016 |
| Date | 01 October 2016 |
| Author | Shaker A. Zahra,Douglas J. Cumming |
| DOI | http://doi.org/10.1111/1467-8551.12192 |
British Journal of Management, Vol. 27, 687–692 (2016)
DOI: 10.1111/1467-8551.12192
International Business and Entrepreneurship
Implications of Brexit
Douglas J. Cumming and Shaker A. Zahra1
York University −Schulich School of Business, 4700 Keele Street, Toronto, Ontario M3J 1P3, Canada, and
1Gary S. Holmes Center Strategic Management and Entrepreneurship, University of Minnesota Carlson School
of Management, 321 19th Avenue South, Minneapolis, MN 55455, USA
Email: Douglas.Cumming@gmail.com; zahra004@umn.edu
This paper provides an overviewof the international business and entrepreneurship impli-
cations of Brexit.Our perspective is preliminary and based on a review of the practitioner,
policy and academic literature over the first month following the Brexit vote. We high-
light some of the potentially negative consequences for marketsin the UK and around the
world that result from barriers to trade and immigrationassociated with the uncertainty
created by Brexit.
Introduction
Brexit is a monumental event that is likely to have
serious consequences, raising challenges while cre-
ating international business and entrepreneurship
opportunities for companies around the globe.
This eect is likely to be felt acutely by North
America which has historically maintained strong
political, cultural and economic relationships with
the UK (Baldwin and Lopez-Gonzalez, 2015).
The 23 June 2016 UK vote to exit the EU givesrise
to the question of how Brexit will aect these long
standing relationships between North American
and UK companies. One source of concern centres
on the continuing existence of the UK itself as a
political entity, with Scotland signalling its intent
to seek independence (Pearson, 2016). Likewise,
Northern Ireland is debating its interest in leaving
(Geoghegan, 2016). There is further uncertainty as
to whether and if so how the UK will in fact leave
the EU (Chalmers and Menon, 2016). Regardless
of the outcomes of these potential moves, there is
agreement that Brexit will unleash fundamental
We owethanks to Sofia Johan for helpful comments and
suggestions. Douglas Cumming gratefully acknowledges
the Social Sciences and Humanities Research Council of
Canada for financial support.
changes in the British business environment that
will profoundly alter the dynamics of the relation-
ship with the EU, North America and, in fact, the
rest of the world.
In this paper, we overview the issues associated
with Brexit and international business and trade,
multinationals and international entrepreneur-
ship. These topics are addressed in turn. Our
perspective is of course preliminary and specula-
tive, reflecting the timing of preparation of this
paper in June and July 2016.
Brexit and international business
North American companies will want to retain
their strong and mutually beneficial relationship
with the EU, already one the world’s biggest
markets, with advanced technologies and highly
skilled and educated labour force (Baldwin and
Lopez-Gonzalez, 2015). In fact, negotiations are
already under way between the USA and EU to
create one of the world’s largest trade and invest-
ment zones,1and President Obama has publicly
reiterated that the UK and EU will remain as the
1See the proposed Transatlantic Trade Investment Part-
nership (http://ec.europa.eu/trade/policy/in-focus/ttip/)
© 2016 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
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