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Junaid Hassan Mand

Name

S2279082
Matriculation Number

IMBD
Degree Programme

Research Project
Module Title

Dr. Susan Akinwalere

Module/Seminar Tutor

2
 16-05-2024
Date

This is my own original work; it has not been submitted elsewhere in

fulfilment of the requirements of this or any other award.

Signed J.mand……………………………………………………………………………

3
 The role of Foreign Direct Investment
(FDI) in the UK Post-Brexit

Abstract
This study examines the effect of political event on foreign direct investment, using the Brexit
(Britain’s exit from the European Union) as an example. Its specific purpose is to find any
changes in the level of foreign direct investment into the United Kingdom after the 2016 Brexit
referendum. This study adopts a descriptive research design that focuses on a study of time series
analysis, looking at the inflows and decline in outflows of foreign direct investment for the UK
before (year 20011-2015), during (year 2016), and after (year 2017-2020) the Brexit referendum.
The study tries to identify any changing trends, patterns, sector, and countries where the UK
direct invests.

This analysis provides evidence of a complex ‘push-pull’ effect of the Brexit vote on FDI in the
UK. Taking the GDP data first, international business literature has long argued that uncertainty
is a deterrent to FDI projects. There has been an enormous amount of policy uncertainty since the
referendum of June 2016, which suggests that investors have expected negative effects of Brexit.
A spike in the number of FDI projects immediately following the vote, as one might expect from
the ‘push’ effect, was followed by a collapse in net inflows of FDI relative to GDP, as the ‘pull’
effect kicked in. The actual effect of policy uncertainty on FDI does vary, however, depending on
the level of direction and clarity of the new policies. The overall negative effect on FDI for the
UK might have been smaller had the policies been fully clear at the outset. There are also big
sectoral differences. For example, the sectors that are the most integrated with EU supply chains
(autos and machinery) have seen the biggest declines in FDI, while government-directed sectors
such as tech and life sciences have been more resilient.

The descriptive design of this study also has its own limitations. While it was not possible to
establish a firm causal relationship between Brexit and FDI trends, the findings contribute to
understanding and point to directions for future research. Causal-comparative designs and

4
qualitative methods (e.g., interviews with investors) could be helpful to examine the influence of
Brexit on FDI into the UK and make better sense of some of the phenomena, especially over the
longer-term.

In conclusion, nor did Brexit trigger a simple decline in FDI in the UK. Rather, FDI patterns
shifted in complex ways in response to the initial sense of opportunity followed by a dampening
effect of policy uncertainty and targeted government policies that favoured some industries while
discouraging others. These insights into FDI responses to Brexit and the rational calculus of
foreign investors can help policymakers design policies to attract the kinds of investments they
want, in these new and uncertain times. This research forms part of an important dialogue on the
impact of Brexit on the UK economy and its foreign investment.

Declaration
I, Junaid Hassan Mand, hereby affirm that the dissertation performed is original and authentic
and has not been submitted for any other academic degree or other purpose.
I confirm that all sources used in this study have been properly cited and referenced to avoid
plagiarism. Any ideas borrowed from others have been acknowledged and credited accordingly. I
also authorise that I have not been involved in any form of academic dishonesty such as
plagiarism or research bias during data collection, the study presents accurate and reliable
results.
I acknowledge that this research is a requirement for the completion of my IMBD degree at GCU
London, and I am committed to upholding the highest standards of academic integrity and ethics
during the research and writing process.
I am aware that any form of academic dishonesty or plagiarism can present severe consequences,
including failure and potential disciplinary action by the university.

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Table of Contents
Abstract............................................................................................................................................2
Chapter 1: Introduction....................................................................................................................6
1.1 Background......................................................................................................................6
1.2 Research Rationale..........................................................................................................7
1.3 Research Aim, Objectives, and Questions.......................................................................8
1.4 Significance of the Research...........................................................................................9
1.5 Outline of this research work...........................................................................................9
Chapter 2: Literature Review.........................................................................................................11
2.1 Introduction..........................................................................................................................11
2.2 Foreign Direct Investment (FDI) and Economic Growth....................................................12
2.3 The UK as a Host for FDI (Pre-Brexit)...............................................................................14
2.4 The Impact of FDI: A Multifaceted Perspective..................................................................16
2.5 The UK and FDI in the Post-Brexit Era:.............................................................................18
2.6 The Evolving Landscape of FDI Post-Brexit:.....................................................................19
2.7 Conclusion...........................................................................................................................20
Chapter 3: Methodology................................................................................................................23
3.0 Introduction..........................................................................................................................23
3.1 The Research Philosophy.....................................................................................................24
3.2 Research Approach..............................................................................................................24
3.3 Research Design..................................................................................................................26
3.4 Data collection methods......................................................................................................27
3.4.1 Data Quality Considerations.........................................................................................28
3.4.2 Limits of Secondary data Collection............................................................................28
3.5 Data analysis methods.........................................................................................................29
Chapter 4: Data Analysis...............................................................................................................30
Introduction................................................................................................................................30
4.1 Data Collection and Analysis...............................................................................................30
4.1.1 Data Description...............................................................................................................30
4.1.2 Data Pre-Processing..........................................................................................................37
4.1.3 Data Analysis....................................................................................................................39
Impact of Brexit-related policies on FDI...................................................................................39

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 Sectoral Trends in FDI...............................................................................................................41
Expectations and projections for FDI........................................................................................46
4.2 Discussion of Findings........................................................................................................49
Chapter 5: Conclusion and Recommendation...............................................................................55
5.1 Summary of Main Findings and Implications...............................................................55
5.2 Contributions of the Study.............................................................................................56
5.3 Limitations of the Study................................................................................................57
5.4 Recommendations..........................................................................................................58
References......................................................................................................................................60

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 Chapter 1: Introduction

1.1 Background
The term "Foreign Direct Investment" (FDI) refers to more than just financial dealings. It means
the foundation, securing, or development of a business by an unfamiliar substance in a host
country, cultivating monetary development through the exchange of basic assets (Salvadore and
Giuliani, 2020). Past capital infusion, FDI works with the progression of innovation,
administrative mastery, and information, going about as an impetus for improvement in a few
key regions:

Foreign direct investment (FDI) frequently results in the expansion or establishment of new
foreign-owned businesses. This expanded monetary action straightforwardly converts into an
ascent in open positions for the nearby labour force. The positive correlation that exists between
FDI inflows and job creation is emphasized in studies by Balasubramaniam et al. (2021),
emphasizing its role in boosting employment and economic well-being. Foreign organizations
carry with them their trend setting innovations and ability. Partnerships, training programs, and
even unintentional "spillovers" that benefit local businesses can all facilitate this knowledge
transfer. This mixture of innovation encourages development and drives the generally
mechanical abilities of the host economy (Buckley et al., 2007). FDI can go about as an impetus
for enhancements underway cycles and the board rehearses inside the beneficiary country.
Foreign firms frequently present more proficient strategies and best works on, prompting more
significant levels of efficiency for both the foreign investor and homegrown organizations.
Balasubramaniam et al. (2021) further underline that FDI can upgrade a country's capacity to
contend in the worldwide commercial center by helping its general efficiency levels.

In June 2016, the United Kingdom (UK) casted a ballot to leave the European Association (EU)
in a memorable mandate known as Brexit (BBC News, 2016). This choice, established in
January 2020, cut off the UK's formal monetary and political binds with the coalition after
almost fifty years of enrolment (Deloitte, 2020). The UK has generally been a magnet for FDI,
drawing in venture across different areas. This engaging quality can be credited to a few factors
that have made a rich ground for foreign venture: The UK has customarily flaunted an advanced
general set of areas of strength for laws privileges requirement, and a moderately steady world of

8
politics. These elements give a protected and unsurprising setting for foreign investors,
cultivating certainty and empowering long haul speculation choices (Buckley et al., 2017).

The UK has a profoundly taught and gifted labour force, making it a positive area for
organizations looking for admittance to ability in different fields. This promptly accessible pool
of gifted human resources permits foreign firms to raise a ruckus around town running and
productively incorporate into the neighbourhood economy (Armstrong and Taylor, 2010). Before
its exit from the European Association, the UK's enrolment in the coalition conceded it
admittance to a huge single market, working with exchange and venture inside the EU (European
Commission, 2023). This entrance gave huge benefits to foreign investors hoping to lay out a
base in the UK and arrive at a more extensive European market.

In conclusion, FDI plays had a basic impact in forming the UK's financial scene. By working
with work creation, innovation move, and efficiency gains, FDI has evidently added to the
country's financial development and thriving (Buckley et al., 2007). In any case, with the UK
exploring its post-Brexit reality, the future direction of FDI in the nation stays an open inquiry,
requesting further examination concerning the possible effects of this huge political and financial
shift.

1.2 Research Rationale

The UK's exit from the European Association (EU) has introduced a time of huge vulnerability
with respect to the fate of Foreign Direct Investment (FDI) in the country (Armstrong et al.,
2020). Brexit presents a perplexing arrangement of difficulties that might discourage foreign
investors (Serwicka & Tamberi, 2018). Now we will discuss some potential challenges to FDI:

The UK's take-off from the EU's Single Market has brought about the inconvenience of new
traditions methodology and expected levies on exchange with the coalition. This can prompt
inflated costs and administrative obstacles for foreign firms working in the UK, possibly hosing
their energy for effective financial planning (Office for National Statistics, 2023). The UK's
administrative scene will probably separate from that of the EU before long. This disparity could
make vulnerabilities for foreign firms acquainted with fit guidelines across the coalition, possibly
obstructing venture choices (Armstrong et al., 2020).

9
Before Brexit, the UK profited from the free development of work inside the EU, giving
admittance to an expansive pool of gifted specialists. With stricter migration guidelines now set
up, drawing in and holding gifted ability from the EU could turn out to be more trying for
foreign firms working in the UK (Institute for Fiscal Studies, 2023).

Despite these difficulties, Brexit may likewise introduce a few open doors for drawing in FDI:

The UK currently has more prominent independence in moulding its own administrative climate.
This could permit the public authority to tailor guidelines to be more appealing to explicit
businesses, possibly attracting new foreign investors. Liberated from the requirements of the
EU's normal exchange strategy, the UK can arrange its own economic alliance with individual
nations and coalitions (Department for International Trade, 2023). This could open new business
sectors for UK-based organizations with foreign venture, possibly expanding the allure of putting
resources into the UK.

While the possible effects of Brexit on FDI are generally examined (Welfens & Baier, 2018),
there stays a shortage of extensive examination that breaks down how these progressions are
really forming FDI designs in the UK (Serwicka & Tamberi, 2018). Understanding the post-
Brexit change of FDI is significant for policymakers expecting to draw in and oversee foreign
venture actually in this new financial climate.

1.3 Research Aim, Objectives, and Questions

This research expects to dissect the change of Foreign Direct Investment (FDI) in the UK's post-
Brexit economy. To accomplish this general objective, the accompanying explicit targets will be
tended to:

1. Assess policy changes (e.g., trade regulations, immigration) impact on post-Brexit FDI
2. To examine the sectors most impacted by changes in FDI
3. To evaluate the long-term projections for FDI flow in the UK

Main Question:

What has been the role of FDI in the UK's economy post-Brexit?

Subsidiary Questions:

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1 How have Brexit-related policy changes affected FDI in the UK?
2 Which sectors have experienced the most significant impacts on FDI since Brexit, and why?
3 What are the expectations and projections for the role of FDI in the UK economy moving
forward?

1.4 Significance of the Research

Grasping the changing role of Foreign Direct Investment (FDI) in the UK's post-Brexit economy
is pivotal for many partners. Here's the reason this research holds huge worth:

Importance for Policymakers: Policymakers require an unmistakable image of what Brexit is

meaning for FDI streams to plan powerful procedures for drawing in and overseeing foreign
investment. This research, by examining strategy changes and their effect on FDI, will give
important bits of knowledge to policymakers figuring out future FDI fascination systems in the
UK. (Armstrong et al., 2020)

Importance for Businesses: Understanding sectoral patterns in FDI permits organizations to

pursue informed choices regarding investment methodologies. By distinguishing areas
encountering expanded or diminished FDI post-Brexit, this research will illuminate organizations
about expected open doors and difficulties in the developing investment scene (Bloom et al.,
2018).

Importance for Researchers: The current collection of research on FDI in the UK pre-Brexit is
broad (e.g., Buckley et al., 2007; Dunning, 1988). In any case, an extensive comprehension of
the post-Brexit change of FDI stays tricky. This research will add to existing information by
giving new experiences into the effect of Brexit on FDI designs and sectoral patterns, filling a
basic hole in momentum research.

Informing Policy Decisions: By examining the effect of Brexit-related arrangements on FDI

streams and recognizing the most impacted areas, this research can illuminate future strategy
choices. Assuming that specific arrangements are found to hinder FDI in unambiguous areas,
policymakers can foster procedures to relieve those adverse consequences (Institute for Fiscal
Studies, 2023). On the other hand, assuming specific approaches draw in FDI, they can be
utilized further to improve the UK's allure to foreign investors (Department for International
Trade, 2023).

11
1.5 Outline of this research work
The accompanying chapters will investigate the research goals in more detail:

Chapter 2: Literature Review - This chapter will thoroughly review existing research on FDI in
the UK, breaking down pre-and post-Brexit patterns, factors affecting FDI choices, and likely
effects of Brexit.

Chapter 3: Research Methodology - This chapter will frame the research plan (e.g.,
quantitative/subjective), information assortment strategies (e.g., overviews, meetings), and
information examination procedures used to explore the research questions.

Chapter 4: Data Analysis & Findings - This chapter will introduce the information examination
discoveries, deciphering them considering the research goals and existing literature.

Chapter 5: Conclusion & Recommendations - The closing section will sum up key discoveries,
recognize constraints, propose future research roads, and give suggestions for policymakers and
organizations regarding FDI in the post-Brexit climate.

By efficiently looking at the literature, utilizing a thorough research technique, and giving a
complete examination, this study plans to add to understanding FDI's change in the UK's post-
Brexit economy.

12
 Chapter 2: Literature Review

2.1 Introduction
Foreign Direct Investment (FDI) had a critical impact in moulding the UK economy for many
years. Characterized as investment by an organization in a foreign country determined to procure
an enduring interest, FDI brings capital as well as technology, mastery, and admittance to new
markets. The UK has generally been a main beneficiary of FDI in Europe, drawing in
investments across different sectors (Dhingra et al., 2016). Various studies archive the positive
effect of FDI on the UK economy. Research by the Centre for Economic Performance (CEP) by
Dhingra et al. (2016) features how FDI adds to job creation, especially in sectors like assembling
and administrations. Furthermore, a report by the Institute for Fiscal Studies (IFS) underlines the
job of FDI in supporting efficiency through technology move and information overflow (IFS).
These advantages at last convert into economic development, with FDI going about as an
impetus for advancement and seriousness.

The UK's choice to leave the European Union (EU) in 2016 has created a shaded area of
vulnerability over the eventual fate of FDI. As examined by Matyas (2020), the Single Market
has generally worked with consistent trade inside the EU, making it a foreign investment magnet.
Leaving the Single Market could prompt expanded trade obstructions and authoritative weights,
possibly preventing FDI. The continuous exchanges with respect to future UK-EU trade relations
establish an environment of vulnerability for organizations. Research by Sieber (2022)
recommends that this vulnerability, coming from indistinct guidelines, could deter expected
investors, making it hard to design.

While the existing literature gives significant bits of knowledge into the potential challenges
presented by Brexit, a few significant viewpoints stay under-investigated. A large part of the
momentum research centres around economic models foreseeing a reduction in FDI inflows
(Dhingra et al., 2016; Caruso et al., 2018). These models, while significant, might not completely
catch the intricacies of financial investor way of behaving and the potential for transformation by
organizations. For instance, a report by the National Institute of Economic and Social Research
(NIESR) proposes that a fruitful trade manage the EU could relieve the anticipated decrease in
FDI (National Institute of Economic and Social Research [NIESR], 2018). A few studies depend
13
intensely on economic demonstrating (Dhingra et al., 2016) which, while important, could profit
from being supplemented by real-world data analysis of post-Brexit FDI patterns. Experimental
studies investigating genuine FDI data post-Brexit, like those by the Office for National Statistics
(ONS) ([ONS], 2023), can give a more grounded point of view on the developing circumstance.
Existing research essentially centres around the expected disadvantages of Brexit (Matyas,
2020). Further analysis is required on likely open doors, for example, the capacity to work out
new trade agreements with non-EU nations (as recommended by Sieber, 2022) and the effect of
more noteworthy administrative adaptability for explicit enterprises. A report by the Department
for International Trade (DIT) subtleties the UK's continuous trade exchanges with different
nations, featuring possible new markets for FDI (Department for International Trade [DIT],
2024).

The effect of Brexit on FDI could fluctuate across various sectors. Investigating verifiable FDI
examples and expected changes for enterprises like finance, assembling, and technology can give
a more nuanced understanding. For example, research proposes that sectors dependent on the
Single Market, like finance, may be even more adversely affected contrasted with technology
sectors that could profit from administrative adaptability (Froot et al., 2019). The adequacy of
government strategies like tax cuts and liberation to draw in FDI post-Brexit requires further
examination. A report by the Institute for Fiscal Studies (IFS) proposes these actions could have
a restricted effect (Institute for Fiscal Studies [IFS], 2023).

By investigating these inquiries and basically analysing the existing literature, this research plans
to dive further into the developing landscape of FDI in the UK. Moving past just foreseeing a
downfall, this research will dissect the multi-layered effect of Brexit and recognize possible open
doors close by the challenges. This basic analysis will consider the limits of existing research
methodologies and the requirement for real-world data analysis to give a more far-reaching
comprehension of the post-Brexit FDI landscape.

2.2 Foreign Direct Investment (FDI) and Economic Growth

Foreign Direct Investment (FDI) alludes to an investment made by an organization in a foreign
country determined to secure an enduring interest and control of a business element. This control
can appear in different forms, affecting the effect of FDI on the host economy (Dhingra et al.,
2016). Laying out another auxiliary or branch in the host country considers a new beginning and

14
complete possession. This approach frequently prompts a more significant level of technology
move and job creation (UNCTAD, 2018). Here, a foreign organization gets or converges with an
existing firm in the host country. While job misfortunes could happen during rebuilding, M&A
can carry prompt admittance to existing framework and conveyance organizations (Caruso et al.,
2018). Growing existing foreign activities in the host country considers utilizing laid out plans of
action. This approach could affect technology move contrasted with greenfield investments.

The hypothetical connection among FDI and economic development has been widely
investigated in scholarly research. Neoclassical development hypothesis, as framed by Robert
Solow (1956), underscores the job of capital collection in driving economic development. FDI
goes about as a huge wellspring of outer capital, which can be utilized to address homegrown
capital deficiencies. This extra capital fills investment in foundation, technology, and
undertakings, at last animating economic action and development (Dhingra et al., 2016).

Source of Regional
Theory Income Differences Evolution of Regional Income Differences
Differences in factor Convergence: Low-income regions catch up to
Neoclassical endowments (capital/labor high-income regions due to diminishing returns, free
Growth Theory ratios, technology) factor mobility, and technology diffusion.
Differences in Conditional convergence: Depends on technology
capital/labor ratios, diffusion, knowledge spillovers, and knowledge
knowledge base, worker mobility. Localized knowledge and limited
Endogenous knowledge-producing worker movement can lead to persistent or widening
Growth Theory industries income gaps.

Table 2.1 Different Frameworks for regional Source of Income

Expanding on neoclassical hypothesis, endogenous development models (e.g., Romer, 1994)

recognize the job of information and advancement in cultivating long haul economic
development. Supplementing these models with real-world data analysis of post-investment
economic patterns in unambiguous sectors can give a more grounded viewpoint. This could
include breaking down data on job creation, efficiency changes, and product development
following FDI inflows across various enterprises.

Research by Rodrik (2006) proposes that FDI in specific sectors could prompt job polarization,
making high-talented jobs while uprooting low-skilled specialists. Further studies zeroing in on

15
unambiguous businesses and their expertise prerequisites can assist with evaluating the effect of
FDI on various sections of the workforce. For instance, examining data on wage changes and
ranges of abilities expected in sectors with high FDI inflows could uncover potential job
polarization impacts. The effect of FDI can shift altogether across various sectors. A basic hole
exists in understanding what FDI means for explicit enterprises. For example, FDI in information
concentrated sectors like technology could greatly affect human resources advancement
contrasted with asset extraction sectors (Dhingra et al., 2016). Future research could investigate
the sectoral subtleties of FDI by examining data on technology move, ability improvement
projects, and job creation across various enterprises following FDI inflows. The natural
ramifications of FDI require further examination.

The connection among FDI and economic development is perplexing and diverse. While the
literature features the expected advantages of FDI, it's urgent to recognize that the adequacy of
FDI relies upon a few elements. Have nations need to foster arrangements that draw in FDI while
alleviating possible downsides. For example, arrangements that support technology move and
investments in human resources improvement can expand the positive effect of FDI (World
Bank, 2020).

2.3 The UK as a Host for FDI (Pre-Brexit)

The UK has a long and laid out history as a main beneficiary of FDI in Europe. As per the United
Nations Conference on Trade and Development (UNCTAD), the UK reliably positioned among
the main three FDI objections worldwide in the many years paving the way to Brexit (UNCTAD,
2018). This pattern mirrors the engaging quality of the UK market for foreign investors, driven
by a few key variables.

The UK's long history of political solidness and adherence to law and order established a safe
climate for foreign investors. This variable is featured by Dhingra et al. (2016) in their research
on the determinants of FDI inflows. A steady and unsurprising political environment gives
foreign organizations the certainty to contribute long haul and go with vital choices. The UK
flaunts a profoundly gifted workforce with a solid schooling system. This promptly accessible
ability pool, especially in finance and expert administrations, makes the UK an alluring area for
foreign organizations looking to lay out or grow their activities. Research by the Institute for
Fiscal Studies (IFS) stresses the job of a talented workforce in drawing in FDI to the UK,

16
especially in information concentrated sectors. The UK's custom of unrestricted economies and a
moderately open economy has generally been a significant draw for foreign investors. This
transparency considers simplicity of passage and bringing home of benefits, further improving
the engaging quality of the UK market. Before Brexit, the UK's participation in the European
Union (EU) furnished foreign organizations with admittance to an immense single market of
more than 500 million shoppers. This admittance to a huge and incorporated market
fundamentally intensified the possible profits from investment for foreign firms (Matyas, 2020).

The commitment of FDI to the UK economy has been significant across different sectors.
London has for quite some time been a worldwide monetary focus, drawing in critical FDI in
banking, protection, and resource the board. A recent report by EY gauges that foreign banks
alone utilized more than 100,000 individuals in the UK, featuring the huge job creation related
with FDI in this area (EY, 2016). While the assembling area has seen some decrease in ongoing
many years, FDI plays had a significant impact in keeping up with its seriousness. For example,
Japanese vehicle makers like Nissan and Toyota have laid out significant creation offices in the
UK, adding to products and job creation (Dhingra et al., 2016). The UK's expert administrations
area, including lawful, bookkeeping, and counselling firms, has likewise profited from FDI.
Foreign investment has assisted with extending the scope of administrations offered and
expanded the worldwide reach of UK-based firms. Pfizer, a significant US drug organization,
laid out its worldwide research central command in the UK in 2013. This $1 billion investment
brought capital as well as mastery and advancement to the UK's life sciences area (Holmes et al.,
2015). In 2010, Tata Steel, an Indian multinational, obtained the UK's Corus Gathering. This FDI
saved jobs in the steel business as well as prompted investments in modernization and
mechanical headways (Caruso et al., 2018).

The UK's situation as a main FDI objective came about because of a mix of elements, including
political dependability, a talented workforce, and admittance to the European market. In any
case, the drawn-out effect of Brexit on FDI inflows stays questionable. While certain studies, like
one by Matyas (2020), propose that decreased admittance to the EU single market could prompt
a decrease in FDI, others contend that the UK's existing assets and progressing efforts to draw in
foreign investment can moderate this impact. By tending to these research holes and intently
observing the developing scene, a more complete comprehension of the UK's future as a host for

17
FDI can be accomplished. This information can inform policymakers in creating systems to keep
up with the UK's situation as a worldwide centre for foreign investment.

2.4 The Impact of FDI: A Multifaceted Perspective

Foreign Direct Investment (FDI) can significantly affect the host economy, impacting different
angles past capital inflows. This part dives into the diverse commitments of FDI, investigating its
effect on job creation, efficiency, advancement, foundation, and worldwide intensity.

One of the promptest effects of FDI is job creation. Foreign organizations directly utilize people
in their activities, adding to nearby business figures. Moreover, FDI invigorates indirect job
creation all through the inventory network as homegrown organizations benefit from expanded
economic action (Dhingra et al., 2016). A concentrate by the Institute for Fiscal Studies (IFS) in
the UK setting found that a 10% increment in FDI prompted a 0.8% expansion in business. This
features the huge job of FDI in producing business potential open doors. FDI frequently goes
about as an impetus for efficiency development in the host economy. Foreign organizations
frequently bring cutting edge innovations and skill, which can be moved to homegrown firms
through different channels, for example, joint endeavours and representative preparation
programs (Balasubramanyam et al., 1996). This information moves permits homegrown
organizations to take on more proficient creation methods, prompting expanded result and
seriousness. Research by UNCTAD (2018) proposes that a 10% expansion in FDI inflows can
prompt a 1.5% increment in efficiency in emerging nations. FDI can likewise animate
advancement and the improvement of new items and administrations in the host economy.
Foreign organizations frequently carry with them state of the art research and advancement
(Research and development) abilities, which can gush out over to homegrown firms through
coordinated effort and rivalry.

18
Factor
Affecting FDI Source Findings
- Balasubramanyam et A larger domestic market size attracts FDI as it allows
Market Size al. (1996) firms to achieve economies of scale and reduces risk.
Open trade policies and free trade agreements can
incentivize FDI by reducing trade barriers and making
Trade Policies - Matyas (2020) it easier for foreign firms to access new markets.
Political stability and a strong institutional framework
Political create a more predictable and secure environment for
Stability - Dhingra et al. (2016) foreign investors.
Well-developed infrastructure, such as transportation
and communication networks, reduces costs for
foreign firms and makes a location more attractive for
Infrastructure - Caruso et al. (2018) FDI.
- Institute for Fiscal A highly skilled workforce can attract FDI in
Labor Skills Studies [IFS] (n.d.) knowledge-intensive industries.

Table 2.2 Factors Affecting FDI

Many studies depend on economic demonstrating to anticipate the effect of FDI (Dhingra et al.,
2016; Caruso et al., 2018). These models give important bits of knowledge; however,
impediments exist. Models may not completely catch the intricacies of business conduct and the
potential for variation by firms (National Institute of Economic and Social Research [NIESR],
2018). Supplementing these models with real-world data analysis of post-investment economic
patterns can give a more grounded viewpoint. Research frequently centres around the general
effect of FDI on the economy, dismissing the dispersion of advantages. A few studies, like one by
Rodrik (2006), recommend that specific sectors could encounter job polarization because of FDI,
with high-gifted jobs being made while low-talented labourers are dislodged.

FDI offers many likely advantages for the host economy. Nonetheless, it's vital to recognize that
these advantages are not ensured. Have nations need to foster strategies that amplify the positive
effects of FDI while relieving possible downsides. For example, arrangements that energize
technology move, investments in human resources advancement, and supportable strategic
approaches can guarantee that FDI adds to long haul economic development and social
advancement (World Bank, 2020).

19
2.5 The UK and FDI in the Post-Brexit Era:
The UK's exit from the European Union (EU) has introduced a time of vulnerability viewing its
future as an objective for FDI. A few potential challenges could obstruct FDI inflows in the post-
Brexit time, requiring the UK government to execute key measures to relieve these dangers and
keep up with its engaging quality to foreign investors.

Preceding Brexit, EU enrolment conceded UK-based organizations' frictionless admittance to the

single market, a coalition of north of 500 million purchasers. This worked with trade and
diminished regulatory weights. In any case, following the UK-EU trade bargain, new traditions
methodology and potential levies have made trade obstructions (Matyas, 2020). These extra
expenses and intricacies could hinder foreign organizations from laying out or extending tasks in
the UK, possibly prompting a decrease in FDI. The UK's detachment from the EU has made a
time of vulnerability with respect to future guidelines. While the UK government has illustrated
its expectation to veer from some EU guidelines, the particulars stay hazy (Department for
Business, Energy & Industrial Strategy [BEIS], 2024). This absence of lucidity can make it hard
for foreign organizations to anticipate the future and may deter them from putting resources into
the UK until the administrative scene turns out to be more unsurprising (Dhingra et al., 2016).

A few organizations with a critical presence in the UK might consider moving their tasks to EU
part states to keep up with consistent admittance to the single market. This possible trip of
organizations could adversely affect FDI inflows to the UK, especially in sectors like monetary
administrations that depend vigorously on unobstructed admittance to the European market
(Caruso et al., 2018). Monetary establishments, for instance, may find it favourable to move to
EU centres like Frankfurt or Amsterdam to keep up with their pre-Brexit admittance to monetary
markets across the alliance. A few studies and reports foresee a reduction in FDI inflows to the
UK because of the challenges. Research by Dhingra et al. (2016) recommends that Brexit could
prompt a 22% decrease in FDI inflows to the UK. Essentially, a report by the National Institute
of Economic and Social Research (NIESR) (2018) predicts a decrease in FDI, especially in
sectors vigorously dependent on the single market, like monetary administrations and
assembling.

While the potential challenges framed above are huge, it's critical to recognize limits in existing
research and stay open to potential open doors that might emerge. Studies foreseeing a decrease

20
in FDI frequently depend on economic models (Dhingra et al., 2016). These models have
impediments in catching the intricacies of financial investor way of behaving and the potential
for transformation by organizations (NIESR, 2018). Real-world data analysis of post-Brexit FDI
patterns will give a more grounded comprehension of the genuine effect. For example, the UK
government can examine data on FDI inflows by area and source country to distinguish patterns
and designer its procedures as needs be. The UK government is effectively arranging trade
manages different nations, possibly making new markets for UK-based organizations. The
viability of these new trade bargains and their effect on FDI still need to be worked out.
International alliances with significant economies like the US, China, and India could open new
open doors for UK organizations and foreign investors looking for admittance to these
developing markets.

2.6 The Evolving Landscape of FDI Post-Brexit:

While the UK's exit from the European Union presents challenges to its status as an objective for
FDI, it likewise opens ways to possible open doors. By utilizing its assets and executing key
drives, the UK can draw in new forms of FDI and cement its situation as a worldwide centre
point for investment.

One likely advantage of Brexit is the capacity for the UK to lay out its own administrative
structure, free of the EU. This adaptability could permit the UK to foster guidelines that are more
helpful for explicit ventures, possibly drawing in new forms of FDI (Department for Business,
Energy & Industrial Strategy [BEIS], 2024). For example, the UK government could smooth out
guidelines in sectors like FinTech, making it a more appealing area for creative monetary
technology organizations. A new report by EY (2024) features the potential for the UK to turn
into a worldwide forerunner in FinTech by cultivating a climate that energizes development and
trial and error. This could include measures like administrative sandboxes that permit FinTech
new companies to test new items and administrations in a controlled climate.

In any case, research by Dhingra et al. (2016) alerts that excessively disparate guidelines could
make vulnerability and deflect a few investors. Finding some kind of harmony between
administrative adaptability and keeping up with international norms will be critical. Brexit has
liberated the UK to seek after trade manages nations outside the EU. These new trade
arrangements can open new markets for UK-based organizations, making the UK a more alluring

21
area for foreign organizations looking for admittance to these developing markets (Matyas,
2020). For instance, an international alliance with China could boost Chinese organizations to
put resources into the UK as an entryway to the European market and then some. The potential
for expanded trade with China is especially pertinent for sectors like assembling and planned
operations, which could profit from smoothed out customs methods and decreased taxes. Be that
as it may, the progress of this procedure relies upon the conditions of the trade bargains arranged.
The UK government necessities to guarantee that any trade bargains:

While the potential open doors examined above are promising, a basic reflection is important to
recognize limits and guarantee the viability of these systems. The progress of these drives relies
on hearty proof and a reasonable comprehension of financial backer way of behaving. Studies by
the National Institute of Economic and Social Research (NIESR) (2018) underline the
significance of leading exhaustive money saving advantage investigations before carrying out
new strategies to draw in FDI. This guarantees that the potential advantages offset the related
expenses, for example, potential tax cuts or administrative changes. Creating and carrying out
powerful arrangements takes time and assets. The public authority needs to guarantee that the
different drives pointed toward drawing in FDI are all around facilitated and really conveyed to
likely investors (Dhingra et al., 2016). Also, building entrust with investors after the
vulnerabilities encompassing Brexit will be essential.

The UK's exit from the EU presents the two challenges and potential open doors for FDI. While
the full effect of Brexit is not yet clear, the UK can possibly use its assets and vital drives to draw
in new forms of FDI and cement its situation as a worldwide centre point for investment. This
technique ought to frame the public authority's vision for drawing in FDI, recognize target
sectors, and detail explicit approaches and drives to accomplish these objectives. An
exceptionally gifted workforce and a flourishing biological system for development will stay
fundamental for drawing in and holding FDI in the long haul. The UK ought to effectively seek
after trade manages significant economies while keeping up areas of strength for with
associations with its European accomplices.

22
2.7 Conclusion
This literature review has delved into the intricate web of relationships between Foreign Direct
Investment (FDI) and the host economy, with the UK serving as a compelling case study. The
analysis has yielded several key takeaways:

FDI goes about as a strong economic motor, encouraging job creation through direct business
and invigorating indirect job development all through the store network (Institute for Fiscal
Studies [IFS]. It can likewise improve efficiency through information move and technology
reception (Balasubramanyam et al., 1996). Besides, FDI can start development by presenting
state of the art Research and development capacities and cultivating a serious climate that boosts
homegrown firms to enhance (Rodrik, 2006). The UK's well-established standing as a great
objective for FDI can be credited to its blend of positive elements, including a background
marked by political steadiness and solid organizations, a profoundly talented workforce flaunting
a vigorous schooling system, and an open and cutthroat economy effortlessly of passage and
bringing home of benefits (Dhingra et al., 2016). Preceding Brexit, participation in the European
Union (EU) further enhanced the UK's engaging quality by giving foreign organizations
admittance to an immense single market of more than 500 million customers (Matyas, 2020).

The UK's exit from the EU has introduced a time of vulnerability seeing its future as an objective
for FDI. A few potential challenges could upset FDI inflows, like the deficiency of frictionless
admittance to the Single Market and its suggestions for trade hindrances and managerial weights
(Matyas, 2020). Expanded administrative vulnerability encompassing future guidelines can
likewise hinder investment (Dhingra et al., 2016). Moreover, a few organizations with a huge
presence in the UK might consider migrating to EU part states to keep up with consistent
admittance to the single market, possibly prompting a trip of organizations and a decrease in FDI
(Caruso et al., 2018). Research by Dhingra et al. (2016) and the National Institute of Economic
and Social Research (NIESR) (2018) support these worries, foreseeing a possible decline in FDI,
especially in sectors like monetary administrations vigorously dependent on the single market.

In any case, amid these challenges, potential open doors likewise arise. The UK's newly
discovered capacity to lay out its own administrative system makes the potential for more
noteworthy administrative adaptability customized to draw in unambiguous enterprises
(Department for Business Energy & Industrial Strategy [BEIS], 2024). This could make the UK

23
a more alluring area for imaginative organizations in sectors like FinTech, for example, by
smoothing out guidelines that encourage trial and error. Furthermore, Brexit liberates the UK to
seek after trade manages non-EU nations, possibly opening new markets for UK organizations
and making the UK a more alluring area for foreign organizations looking for admittance to these
developing markets (Matyas, 2020). The outcome of this system relies based on the conditions of
the trade bargains arranged, with an emphasis on focusing on market access and considering
correspondence (Department for International Trade [DIT], 2024). The UK government can
additionally use its post-Brexit independence by creating designated strategies to draw in FDI in
unambiguous high-development sectors like sustainable power or man-made reasoning (Caruso
et al., 2018; Invest in Britain, 2024). The viability of this approach depends on cautious
recognizable proof of high-development sectors and the advancement of cutthroat investment
bundles that join monetary motivating forces, smoothed out guidelines, and admittance to ability
and research framework.

24
 Chapter 3: Methodology

3.0 Introduction
This chapter frames the research methodology utilized to examine the expected open doors and
difficulties encompassing Foreign Direct Investment (FDI) in the post-Brexit UK scene. The
research design uses a quantitative methodology, zeroing in on the analysis of numerical data to
comprehend the effect of Brexit on FDI designs. This methodology is educated by the Saunders
Research Onion (Saunders et al., 2007), a calculated system that guides researchers through the
different phases of fostering a strong research strategy. The onion representation addresses the
various layers of choices a researcher should make, with the external layers impacting decisions
in the internal layers.

Fig 3.1 Saunders Research Process Onion. Source: Saunders et al (2009)

25
The research methodology is directed by the Saunders Research Onion system. This chapter will
detail each stage, legitimizing our decisions for a quantitative methodology with a comparative
study design. We'll utilize secondary data analysis from reliable sources such as government
databases (ONS, DIT), international organizations (World Bank, OECD) and employ descriptive
statistics and potentially econometric techniques to analyse the impact of Brexit on FDI in the
UK.

3.1 The Research Philosophy

The fundamental assumptions directing this research approach are established in a positivist
philosophy. As framed by Bryman (2016), positivism underscores the presence of an objective
reality that can be estimated and broke down through scientific methods. This adjusts impeccably
with our research objective of exploring the effect of Brexit on Foreign Direct Investment (FDI)
in the UK.

Positivism offers major areas of strength for a for this concentrate because of its accentuation on
quantifiable data. A few researchers support this point of view. Saunders et al. (2007) feature the
significance of quantifiable data in positivist research. For our situation, the effect of Brexit on
FDI can be broke down utilizing objective data focuses like FDI inflows, stocks, and sectoral
appropriation. By zeroing in on such data, we can lay out serious areas of strength for our
analysis and try not to bring subjective interpretations into the outcomes. Moreover, positivism
makes the way for utilizing strong statistical techniques ideal for breaking down quantitative data
(Creswell, 2014). Through quantitative analysis, we can distinguish examples and connections
between Brexit as an independent variable and FDI patterns as dependent variable. Applying
statistical methods like regression analysis (Sekaran, 2003) empowers us to reach objective
determinations about the possible impact of Brexit on FDI in the UK. These techniques give a
solid system to investigating huge datasets and recognizing statistically critical connections.

In any case, recognizing the limits innate in positivism is significant. An emphasis on objective
data could not completely catch the emotional encounters and impression of partners engaged
with FDI choices, like financial investors or policymakers. We perceive this impediment and
recognize the expected worth of corresponding subjective research approaches in later
examinations.

26
3.2 Research Approach
This research is aimed to adopt deductive (Top down) reasoning approach. This reasoning
utilizes quantitative methodology as our research design (Saunders et al., 2021). The deductive
reasoning steps from a general theory to a specific case (Saunders et al., 2021). There are some
reasons to adopt deductive reasoning in our study.

On the one hand, we will extract knowledge from the previously applied theories trying to
predict the influence of political events on FDI, as well as hypothesise the potential impact of
Brexit on the FDI trends in the UK. Established theories will provide us a basis for our research
(Bryman & Bell, 2016). On the other hand, a deductive approach does fit with a quantitative
methodology employed in our study as the quantitative methodology is mainly aimed at
collection and analysis of the numerical data (Saunders et al., 2007). The latter will be used for
testing the formulated hypotheses and identifying the influence of the Brexit event on trends of
FDI.

Based on our prior knowledge, we will formulate a series of hypotheses about the effects of
Brexit on FDI to the UK. These hypotheses are derived from existing theories, and they provide
the direction for our empirical research. Our quantitative methodology — deductive in nature —
will be suitable for this study since it is based on data collection and processing via various
quantitative methods. We will use the data to evaluate whether hypotheses developed above will
be applied and the extent of the influence of Brexit on FDI.

We will collect time series data on FDI into the UK and, depending on the research design, other
relevant countries, over time. We will then examine whether the type of foreign investment or the
flows of foreign investment into the UK (from the US, other major economies, and other less-
developed countries) changed before and after the Brexit referendum. Then, we will utilise
statistical methods like regression analysis to validate our hypotheses built. Thus, we will be able
to measure relationships between Brexit as Independent Variable and patterns of FDI as
Dependent Variable, and then arrive at conclusions that are statistically significant.

The aim is to overcome the weaknesses of both qualitative and quantitative approaches by using
deductive reasoning in a quantitative framework. While qualitative reasoning is good at
incorporating priors and deriving conclusions that do not contradict the available evidence,

27
quantitative reasoning allows for data-driven assumptions and testing. The proposed research
follows a systematic and unbiased way to investigate the effect of Brexit on FDI in the UK.

3.3 Research Design

This part explains the research design used to analyse Brexit’s effect on FDI in the UK. We are
choosing a descriptive research design with a focus on time series analysis (Saunders et al.
2021). While an experimental design will manipulate variables to demonstrate cause-and-effect
(Saunders et al. 2021), a descriptive design will explain and describe the characteristics of a
phenomenon over time (Saunders et al. 2021). The aim here is to describe FDI activity in the UK
before the Brexit referendum, during the UK leaving the EU and after that, as well as to analyse
potential changes in FDI patterns due to this event.

A descriptive design has some advantages for this research question. First, we can paint a
detailed picture of FDI in the UK. We will be able to collect information on volume and
composition (for example, how much inflow and outflow happened in the UK), sectoral
distribution (how much investment occurred in different industries) and source countries (where
investment came from). Overall, in the data from the sample planning and analysis periods, we
will get a good sense of FDI activity prior to the Brexit referendum, making it a strong baseline
for comparison. Second, through a comparison of measures of FDI activity across the periods
before and after the referendum, we can look at where any potential changes might have
occurred. This descriptive comparison might show changes in how FDI flows occurred after
Brexit. For example, it may show that FDI inflows increased in the UK after Brexit, decreased,
or shifted substantially from one sector to another, or from one country to another. It’s important
to point out that we can’t prove causation with a descriptive design. Nevertheless, we can see
where changes in FDI levels after Brexit occurred, which can serve as a starting point for further
investigation and the study of more causally oriented designs.

It is particularly suitable to our research aim as it enables us to monitor trends and patterns of
FDI activity over a relevant timeframe, namely the years preceding and following the Brexit
vote. By assessing changes in aggregate (i.e., total or average) and sectoral inflows and outflows,
as well as the sources of FDI in the UK during this time, we might better understand how these
aspects of FDI might change if the UK does leave the EU. We might be able to observe
immediately discernible volatility, as well as longer-term shifts in how investment activity is

28
conducted. Collect data on the basic features of FDI activity into and from the UK for a given
time, in a micro-level detailed characterisation approach. It would include total inflows and
outflows; sectoral distribution (i.e., how the investment is spread over different economic
sectors); geographic source-countries; and so on. This detailed characterisation provides a picture
of FDI activity over a given time. It is the raw material for a time series analysis, allowing us to
identify changes in aggregate FDI activity but also pinpointing specific sectors or source
countries potentially most affected by Brexit.

In the following sections, I will provide more details on the data collection methods and the data
analysis techniques that will be used during this investigation. These details will help to explain
how data will be collected from quality sources, as well as show how I will use time series
analysis to explore trends and patters over time with FDI activity within the UK.

3.4 Data collection methods

This segment frames the data collection methods for our research exploring the effect of Brexit
on FDI in the UK. As our research design is descriptive, we will collect panel data for time series
analysis on FDI activity in the UK. We can use time series data to provide an insight into the
trends and patterns over time, and whether the Brexit referendum has made a significant impact
on the FDI flows.

Given the quantitative idea of the review and the emphasis on FDI patterns, secondary data
collection will be the essential strategy utilized (Saunders et al., 2007). This approach offers a
few benefits for this research. Secondary data sources frequently give extensive datasets on FDI
inflows, stocks, and sectoral dissemination across different nations. This permits us to
accumulate the vital data for the UK and picked correlation nations over a characterized period
pertinent to the pre-and post-Brexit time. For example, the World Bank offers broad data on FDI
patterns across different economies (World Bank, n.d.).

Secondary data from trustworthy organizations like the World Bank, International Monetary
Fund (IMF), or national statistical offices is by and large thought to be dependable and
normalized. These associations utilize thorough data collection techniques, guaranteeing the
consistency and exactness of the data (International Monetary Fund, n.d.).

29
Using existing data is a practical methodology contrasted with gathering essential data through
studies or meetings. This takes into consideration a more proficient designation of research assets
towards data analysis and translation. World Bank Gives thorough data on FDI inflows, stocks,
and sectoral dispersion for countless nations. International Monetary Fund (IMF) Offers data on
FDI pointers, including equilibrium of instalments measurements applicable to FDI analysis.
national statistical offices of the UK and picked examination nations give point by point data on
FDI inside their economies.

We will cautiously choose the most applicable and dependable secondary data sources to
guarantee the exactness and Vigor of our analysis.

3.4.1 Data Quality Considerations

While using secondary data offers benefits, tending to potential quality concerns is significant:

Data Consistency: We will guarantee consistency in the definitions and approaches utilized for
data collection across various sources. Irregularities in data collection methods could bring
predispositions into the analysis. Counselling data source documentation and systemic notes will
assist with recognizing any likely inconsistencies.

Data Precision: We will basically assess the data sources and their documentation to guarantee
the exactness and unwavering quality of the data. Confirming data exactness through
examinations with different sources or official reports reinforces the research.

Data Accessibility: Data accessibility for every single applicable nation and time spans could
shift. We will address any expected holes by using elective sources or changing the research
period to guarantee an adequate data collection period for a strong analysis.

3.4.2 Limits of Secondary data Collection

While secondary data offers huge benefits, a few impediments should be recognized:

Restricted Command over Data Collection, we depend on the strategies utilized by the first data
gatherers. Restricted command over data collection cycles could present unexpected
predispositions or irregularities. Notwithstanding the unwavering quality of trustworthy sources,
there's dependably an opportunity of blunders in data collection or revealing. Cautious
assessment and check techniques are essential. Data Accessibility Imperatives, the ideal data

30
probably won't be accessible for all nations or time spans. We could have to change the research
scope or period to oblige data accessibility. By recognizing and tending to these limits, we can
improve the straightforwardness and validity of the research. The accompanying area will talk
about the data analysis techniques that will be utilized to break down the gathered data on FDI
drifts and survey the possible effect of Brexit.

3.5 Data analysis methods

This part of the paper describes the way we analysed the data to find out if Brexit had any
influence on FDI in the UK.

We will also use statistical analysis to summarise and describe the FDI activity from the data we
collected. Here are some specific techniques we might use:

Descriptive Statistics: This section will involve conducting analysis of the FDI data for the UK
and the comparison countries over the chosen time, using descriptive statistics such as the mean,
median, standard deviation, and frequency tables. The aim of this part of the study would be to
understand the basic behaviour of the data, such as the central tendencies of the data, the
variances, and whether there is any obvious pattern present.

Time Series Analysis: Trend and seasonality will be uncovered through regression analysis
across time-series. Some specific techniques we will use:

Time Series Plots: Plotting the data over time gives us an idea about whether the trend in FDI
changes following Brexit referendum or not. These plots help to analyse the data for fluctuations,
seasonality, and trend. The autocorrelation analysis will indicate the association between values
of a variable (e.g., FDI inflows) at a given point in time with its own values at previous time
points. This can be used to check for patterns of dependence in time-series data.

Software Tools: We will run the analysis in statistical packages (for example, Excel), which
allow us to run a variety of statistical and time series analysis procedures, which will help you to
explore your data and interpret results.

Admittedly, there are limitations to our analysis. Moreover, a descriptive design is not able to
demonstrate causation. Although we could uncover possible relationships between FDI and
Brexit, and negative effects of Brexit on FDI flows, doing the research using more robust designs

31
might be required to make causal inferences. Further, the specific time and data availability could
influence the outcome of our analysis.

32
Chapter 4: Data Analysis

Introduction
This chapter will cover the analysis of the data that was collected from the World Bank, ONS (if
available) and DIT to determine what role FDI will play in the UK after it leaves the EU. We will
use the quantitative method and answer the research questions derived in chapter 1 using
appropriate statistical methods.

First section 4.1 will be a descriptive statistical analysis. In this section, we will first present each
data collected from a source and describe its analysis by the statistics method. In this section, we
will give the details of research questions and explain the steps of questions analysis (cleaning
and pre-processing data if needed). Finally, in section 4.2, we discuss our findings. We start by
reporting the results of the quantitative analysis; and in the subsequent discussions we delve into
the implications of our results for each research question. This section will partly involve meta-
reflections on how our findings relate to or broaden existing knowledge on the post-Brexit FDI
phenomenon, where we will also draw on some relevant literature from Chapter 2 to inform our
discussions and interpretations.

Chapter 4 tries to offer a better theoretical and quantitative understanding of the role of FDI in
the UK’s post-Brexit economy through an in-depth analysis and discussion of the results.

4.1 Data Collection and Analysis

4.1.1 Data Description

Department for International Trade (DIT)

These data were extracted from the Department for International Trade inward investment results
report (various years 2011 -2020).

Description of Data: The DIT data above illustrates data on FDI project profile and sectoral
trends in the UK from 2011 to 2020. It has two main parts:

33
FDI Projects (2011-2020): The table below provides information about new investments,
expansions (including retention), as well as the number of mergers and acquisitions along with
total number of FDI project in UK from 2011-2020 in terms of yearly data.

FDI Projects (2011-2020)

Year New Expansions (inc. Mergers and Total

Investments retention) Acquisitions Projects

2011/12 752 506 148 1,406

2012/13 777 577 205 1,559

2013/14 820 677 276 1,773
2014/15 1,058 740 190 1,988

2015/16 1,130 821 262 2,213

2016/17 1,237 822 206 2,265

2017/18 1,179 714 179 2,072

2018/19 1,035 554 193 1,782

2019/20 1,153 504 195 1,852

Table 4.1: FDI Projects (2011-2020) Source: Department for International Trade inward
investment results report (various years 2011 -2020).

Firstly, the total number of FDI project from 2011-2020 shows that it increased from 1916 to
2523 respectively. Furthermore, new investments from 2011-2020 shows a decreasing trend from
825 to 522 respectively. While expansions (including retention) show an increasing trend from
885 to 1702 respectively.

34
Finally, mergers and acquisitions from 2011-2020 shows an increasing trend from 186 to 299
respectively. Perhaps, UK will continue to be an attractive destination for foreign investment in
the future due to it being an English-speaking country with a well-developed legal system and it
is the gateway to Europe.

Sector Breakdown for FDI Projects and Jobs (2011-2020): This table displays the number of FDI
projects and the jobs in each sector in the UK every year from 2011 to 2020.

Sector 2011/ 2012/ 2013/ 2014/ 2015/ 2016/ 2017/ 2018/ 2019/
12 13 14 15 16 17 18 19 20

Advanced 145 - 418 468 518 102 147 130 161

Engineering
and Supply
Chain
Aerospace - - - 43 - 40 48 42 54
Automotive - - - 104 - 115 108 93 80
Biotechnolog 137 - - - - 82 74 53 56
y and
Pharmaceutic
als
Business and 74 131 - - - 131 160 155 164
Consumer
Services
Chemicals 113 - - 53 - 43 48 43 66
and
Agriculture
Creative and 87 - 400 486 568 140 121 111 110
Media
Electronics 103 - 104 110 138 96 112 85 67
and
Communicati

35
 ons
Environment, - - - - - 141 171 142 148
Infrastructure
, and
Transportatio
n
Extraction - - - - - 47 39 41 33
Industries
Financial 123 309 385 515 561 185 172 148 139
Services
Food and - - - - - 121 146 115 138
Drink
Life Sciences 137 142 156 168 178 106 110 115 103

Renewable 113 - 310 241 260 83 68 41 37

Energy
Software and 233 - - - - 357 381 366 390
Computer
Services
Wholesale - - - - - 70 167 102 106

Total 1,406 1,559 1,773 1,988 2,213 2,265 2,072 1,782 1,852
Table 4.2: Department for International Trade inward investment results report (2011 -2020)

Overall, there is a fluctuation in data over the ten-year period. The finance and business services
sector consistently had the largest number of projects and jobs. The following is information
regarding the sectors:

Timeframe: The table lists information about the emigration patterns for a consistent 10-year
duration, from 2011/12 to 2019/20.Although the Brexit referendum took place in 2016, this
period allows us to analyse any potential pre-Brexit trends and contrast them with the period
after the referendum.

Office for National Statistics (ONS)

36
Source: Office for National Statistics (ONS) – Foreign direct investment involving UK
companies report (various years 2012-2021).

The data from the Office for National Statistics (ONS) displayed foreign direct investment (FDI)
inflows (£ billion) into the UK from overseas companies for different years from 2012 to 2021.
This covers the pre- and post-Brexit period.

Year Inward position Outward position Net

2012 912.9 1073.5 160.6
2013 918.5 1090.6 172.2
2014 1013.3 1078.7 65.4
2015 1032.5 1084.0 51.4
2016 1187.3 1274.6 87.3
2017 1392.5 1369.1 -23.4
2018 1572.8 1453.1 -119.7
2019 1640.6 1651.8 11.1
2020 1919.2 1753.3 -165.9
2021 2002.4 1769.3 -233.0
Table 4.3: Foreign direct investment outward, inward and net positions, 2012 to 2021(Unit: "£
billion")

The data is made of four parts:

Inward earnings on UK foreign direct investment by industry, 2012 to 2021: This table presents
inward earnings on UK foreign direct investment by industry sector for the period of 2012 to
2020.

Outward earnings on UK foreign direct investment by industry, 2012 to 2021: This table presents
outward earnings on UK foreign direct investment by industry sector for the period of 2012 to
2021.

Net: total net value of the inward earnings and outward earnings on UK foreign direct investment
from 2012-2021.

37
Time period - A 10-year period is considered from 2012 to 2021, with a breakdown of pre-Brexit
period from 2012 to 2016 and post-Brexit period from 2017 to 2021. This period is selected
based on the idea that the Brexit vote could have influenced changes in FDI.

The other data displays yearly records of inward FDI flow by component direction. There are 7
types of components mentioned here, specifically foreign companies share of UK profits,
reinvested earnings, equity capital, acquisitions, disposals, inter-company accounts and branch
head-office accounts. The time frame of data collected between 2012 to (2021) allows analysis of
changes before and after the 2016 Brexit referendum.

Measure 201 201 201 201 201 201 201 201 202 202
2 3 4 5 6 7 8 9 0 1
(£ (£ (£ (£ (£ (£ (£ (£ (£ (£
mil mil mil mil mil mil mil mil mil mil
lio lio lio lio lio lio lio lio lio lio
n) n) n) n) n) n) n) n) n) n)
Foreign companies’ share of UK 41, 47, 45, 45, 47, 56, 72, 41, 52, 70,
subsidiaries' and associates' net 516 560 074 651 038 626 575 193 637 508
profits
Less dividends paid to foreign 42, 32, 40, 38, 36, 44, 63, 53, 54, 78,
parent companies 402 768 084 751 089 762 218 319 735 467
Unremitted profits (reinvested - 14, 4,9 6,9 10, 11, 9,3 - - -
earnings) 886 792 90 01 949 864 57 12, 2,0 7,9
125 97 59
Equity Capital 30, 21, 13, 26, 173 44, 52, 37, 28, 33,
794 969 209 070 ,23 525 754 851 371 664
1
Acquisition of UK companies’ 37, 27, 20, 30, 184 51, c 66, 42, 74,
share and loan capital 550 006 558 093 ,63 628 794 230 021
9
Disposal of UK companies’ share - - - - - - c - - -
and loan capital 6,7 5,0 7,3 4,0 11, 7,1 28, 13, 40,

38
 56 37 49 22 408 03 943 859 357
Net increase in amounts due to 2,7 - - - 8,2 13, - 19, - -
foreign parents on the inter- 03 3,4 3,4 7,8 55 301 1,0 162 23, 48,
company account 51 12 06 23 036 259
Increase in amounts due to - - 4,4 - 15, 8,0 10, 363 36, -
foreign parents on the inter- 2,4 2,1 19 1,2 811 72 354 214 14,
company account 55 98 29 196
Increase in amounts due from - 1,2 7,8 6,5 7,5 - 11, - 59, 34,
foreign parents on the inter- 5,1 54 31 77 56 5,2 377 18, 249 063
company account 58 28 799
Net increase in amounts due to 2,4 - 205 144 - 5,1 4,7 - 31, -
foreign parents on the branch 88 255 482 94 71 2,6 540 29,
head-office account 53 194
Increase in amounts due to 3,4 150 1,3 1,0 718 10, 2,1 4,1 50, c
foreign parents on the branch 54 90 65 526 11 30 249
head-office account
Increase in amounts due from 966 406 1,1 921 1,2 5,3 - 6,7 18, c
foreign parents on the branch 85 00 32 2,6 83 709
head-office account 60
Total net FDI flows in the UK 35, 33, 14, 25, 191 74, 65, 42, 34, -
099 054 993 309 ,95 884 860 234 777 51,
2 748
Table 4.4: Summary of inward FDI flows by component (directional)(2012-2021)

This succinct description of the ONS data lays the basis for the analysis presented in Section 4.2,
especially how inward FDI flows, and the sectoral tendencies changed with Brexit.

World Bank Data

Data Source: World Bank Open Data (or specify the specific database used)

Note: This data describes the net inflow of foreign direct investment (% of GDP) overseas in the
UK through the World Bank's data. The data covers a period of 10 years from 2011 to 2020.

39
 Year FDI Net Inflows (% of GDP)

2011 1.014039752
2012 1.726975994
2013 1.95605174
2014 1.921567748
2015 1.548321685
2016 12.07885281
2017 4.677309144
2018 -0.872604334
2019 0.694070008
2020 5.82642061
Table 4.5: Foreign direct investment, net inflows (% of GDP) (2011-20) United Kingdom
(Source: World Bank)

Time period: from 2011 to 2020. The Brexit referendum in 2016 allows us to check if there were
any pre-Brexit trends and what happened after the referendum.

4.1.2 Data Pre-Processing

A quantitative analysis of the effect of Brexit on FDI in the UK needs to embrace a multifaceted
approach, collectively utilising data from a range of sources, whereby data grouping, data cross-
walking and triangulation, as well as specific data analysis techniques, can shed light on the
complexity in the situation (Dhingra et al., 2016) ([ONS], n.d.) ([UK Government], n.d.)

Department for International Trade (DIT): The DIT forms an important source for tracking FDI
project activity in the UK. The data encompasses both the number of projects (broken down by
type – i.e. new investments, expansions, mergers, acquisitions – and sector [UK Government],
n.d.) as well as the geographic component. The data contains the number of projects located in
the UK or elsewhere. A notable weakness is that the data does not inform us on the value of
projects, thereby making it difficult to assess investment volume in the UK.

Office for National Statistics (ONS): The ONS provides complementary data to FDI statistics,
but at a much more granular level. For example, you can download data ranging from the share
of the profits of UK subsidiaries that are owned by foreign companies, through to flows of equity

40
capital, and acquisitions of the share capital of UK companies ([ONS], n.d.). Reinvested earnings
– which are the profits made by foreign companies operating in the UK that are not distributed as
dividends but invested back into the UK – is especially useful for understanding profitability
trends in different sectors.

Following are the techniques used for grouping and integration of the data from above sources:

Grouping by Time Period (Time Series Analysis): DIT and ONS data can be grouped by year (or
quarter) to examine the trend of FDI activity across time using time series analysis. This helps us
to compare the pre- and post-Brexit periods to see if there are any shifts in FDI activity in the
post-Brexit period. Did FDI volume or sectoral composition change after the UK left the
European Union? Time series analysis can answer this question and help us determine how the
Brexit might affect the overall level of FDI.

Cross-sectional (by sector) aggregation of FDI project data (DIT) allows us to identify the
sectors where there are noticeable fluctuations or increases in investment after Brexit. In this
case, sectoral data on profitability from the ONS (on a limited timeseries) can complement the
sectoral analysis. This would indicate whether it is only high-profitability sectors that continue to
grow and attract new investments while the volume might be contracting. Are investors
attempting to maximise profit from their already-established operations in certain sectors, due to
the post-Brexit uncertainty?

If we combine data on the number of FDI projects (DIT) with data on reinvested earnings
(ONS), where data are available for the same sector, it might be possible to provide a clearer
picture of what is happening. Is it just a decline in volumes significant due to high-profitability
sectors continuing to attract new investments? If we look at the category of FDI projects (DIT),
we might get further insight into investor behaviour. An increase of M&As in a specific sector
could mean that the investors are consolidating or that, even before Brexit, they were in a
holding pattern in a sector they already know. Are investors buying existing assets rather than
undertaking new projects, due to perceived risks? While time series and cross-sectional analysis
is a useful approach, additional types of investigation might also be fruitful. For example,
industry reports, or government documents, might help to shed light on the underlying factors
driving trends in particular sectors of interest. Moreover, if ONS data for other years after 2020

41
are available, it would be helpful to push out the sector analysis further, to get a fuller sense of
how sectoral trends have evolved since Brexit.

These are by treating the data to detect temporal and spatial patterns in it, by using time series
analysis as well as cross-sectional data analysis. How did FDI in the UK change after Brexit,
especially in different sectors? If one merges volume and profitability data, does it become
possible to deduce structural changes in FDI? While the chapter does not fully address all these
questions, this approach is a good starting point for further research as well to get a more
nuanced understanding of a fundamental issue in a post-Brexit UK – the changing nature of FDI
in the country. By using these techniques and recognising the limitations, one moves far beyond
simplistic narratives and slanted views of a critical issue. This will help to inform better policies
to attract foreign investment and create a strong and diverse UK economy.

4.1.3 Data Analysis

Impact of Brexit-related policies on FDI

Looking across multiple sources of data, we begin to see a more nuanced picture of the effects of
Brexit-related policy on inward FDI to the UK. Once more time has passed and the post-Brexit
trend is crystal clearer, we may have the opportunity to be much more conclusive. But at present,
let’s take stock of the evidence.

From our data source DIT, we have divided the data into pre and post Brexit to analyse the trends
but implication and effects of policy change after Brexit count in 2019-20 which is given as
below table.

Average Projects Average Projects Average Average Projects Average

Pre-Brexit (2011- Post-Brexit projects pre- Post-Brexit (2019- Change
17) (2017-20) Brexit (2014- 20) (%)
15)
1,867 1,993 1,881 1,817 -3.49477
Table 4.6: Analysis of DIT data

FDI figures in the wake of Brexit broadly match this pattern, although there’s a more complex
picture painted by the data gathered by the Department for International Trade (DIT). The

42
number of FDI projects in the UK grew from 1,406 in 2011/12 to peak in 2016/17 at 2,265, but
in 2019/20 had fallen back to 1,852. In other words, the rise in FDI projects that we’ve seen is
broadly consistent with the pattern found by Serwicka and Tamberi in 2018, who reported that
two years after the Brexit referendum the UK had 17-20 per cent less FDI inflows than usual,
due to policy uncertainty. Here is the time series plot created in excel using the data from DIT to
visually analyse the FDI trends:

FDI Projects by Project Type (2011-2020)

2500

2000
No. of Projects

1500

1000

500

0
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Years

New Investments Expansions (inc. retention)

Mergers and Acquisitions

Fig 4.1: FDI Projects by Project Type (2011-2020) (Source: Department of International Trade)

Data illustrates the FDI net inflows as a percentage of GDP in the UK. The data sourced from
World Bank can support the same argument. This shows a clear rise in the percentage of net
inflows of FDI in the UK starting from 1.01 per cent in 2011, reaching a peak of 12.08 per cent
in 2016 and then falling to 5.83 per cent in the year 2020. This trend further confirms the same
argument that was put by the UK Trade Policy Observatory’s (2019) report of the potential
consequences of a ‘hard Brexit’ scenario to the FDI in sectors that are highly dependent on EU
market access. The Below graph shows the FDI net inflows is created in excel using the data
from World Bank in order to visually analyse the net inflows trends in percentage of GDP for
UK.

43
 FDI Net Inflows (% of GDP)
14
12
10
FDI Net Inflows

8
6
4
2
0
2010 2012 2014 2016 2018 2020 2022
-2
Years

Fig 4.2: FDI Net Inflows (% of GDP) 2011-20 (Source: World Bank)

The trend of equity capital and acquisition of UK companies’ share and loan capital, which has
begun to recover in recent years, seems to be the most stable, compared with the volatility of the
net increase in amounts due to foreign parents on the inter-company and branch head-office
accounts, as presented by you using data from the ONS. This pattern is linked to Brexit-induced
uncertainty about the prospects for cross-border operations and supply chains. The UK Trade
Policy Observatory (2019) observes that Brexit uncertainty is a significant part of the equation.

We need even more research to be done to accurately pinpoint these distinctions. Looking at
industry reports or government publications might reveal what is driving changes in FDI trends,
particularly important sectors where the trend is up or down following Brexit. For example,
analysing the correlation between a change of GDP growth rate and FDI volume might give us
clues as to how the health of the UK economy in general (from the inflow of money) might be
affecting foreign investment. Acknowledging these complexities, conducting further research,
and paying attention to the limits of our data can help us to move beyond this simplistic narrative
and shed light on the nuances of this unfolding story.

Sectoral Trends in FDI

Besides the volume of FDI, the impact of Brexit in the UK is more nuanced if we look at which
sectors are attracting or losing foreign investment. The Department for International Trade (DIT)

44
publishes a sector breakdown of FDI projects. This information can be used to identify sectors
showing large changes or continuous growth since Brexit.

DIT data have shown much smaller declines in FDI projects since January 2021, including
software, business services, and life sciences. These findings are consistent with the OECD
(2020) report that shows that Brexit-related collapses in FDI took place mostly in the
automotive, chemicals and financial services sectors. The difference between the sectors comes
from the degree of their integration with EU market and supply chains, and the UK government’s
intention to retain it as a location for investment in ‘high-value, research-intensive’ business.
OECD (2020) and Regeneris Consulting (2019).

This section draws on data from the Department for International Trade (DIT) concerning the
number of FDI projects in the UK broken down by sectors in each financial year (2011/12-
2019/20). The DIT publishes an annual report highlighting the main trends and shifts in foreign
investment into the UK economy over the period between 2016 and 2020, which covered a few
months of the Brexit transition period. Here is the time series analysis plot created in excel using
the data from DIT to present a clear picture sector wise distribution Pre and Post Brexit.

Sector Breakdown for FDI Projects (2011-2020)

600
400
200
No. of Projects

Sectors

2011/12 2012/13 2013/14 2014/15 2015/16

2016/17 2017/18 2018/19 2019/20

Fig 4.3: Sector Breakdown for FDI Projects (2011-2020) (Source: Department of International
Trade)

45
Advanced Engineering and Supply Chain: This industry also follow a fluctuating trend from
2012/13 to 2019/20. The number of FDI projects in the sector had a peak of 518 in 2015/16 and a
fall to 161 in 2019/ 20 which suggests foreign investment in this industry is very volatile.
Aerospace: Following a period of lower FDI projects, this sector rebounded somewhat, with the
number of projects in this category rising from 40 in 2016/17 to 54 in 2019/20, indicating some
resilience in the ability to attract foreign investment. Automotive The number of FDI projects
involving this sector has also decreased from 104 in 2014/15 to 80 in 2019/20. This could
potentially reflect sensitivities of the sector to the uncertainties related to Brexit. Biotechnology
and Pharmaceuticals: This sector has been mixed, with the number of FDI projects dropping
from 137 in 2011/12 to 56 in 2019/20. The possibility of foreign investment dropping again.
Business and Consumer Services: This sector has generally seen a higher and almost stable trend,
with the number of FDI projects rising from 74 in 2011/12 to 164 in 2019/20. This indicates that
the sector has been more successful in attracting foreign investment. Chemicals and Agriculture:
The number of FDI projects related to this sector has been fluctuating, with a record low of 43 in
2016/17 and reaching up to 66 in 2019/20, depicting contradictory foreign investment trends.
Creative and Media: This sector saw a massive surge in the number of FDI projects from
2011/12 (peak: 568; 2019/20: 110), demonstrating the volatility in foreign investment in this
sector. Electronics and Communications: The number of FDI projects in this sector dropped from
138 in 2015/16 to 67 in 2019/20, which indicates that foreign investment might be dwindling.
Financial Services: Following the highest number of FDI projects since 2011/12 with 561 in
2015/16, the financial services sector dropped to 139 in 2019/20, possibly indicating sensitivity
to a wider range of Brexit uncertainties. FDI projects in Life Sciences: Although fluctuating, it
kept in a relatively stable level between 103 (2019/20) and 178 (2015/16), which demonstrates a
certain resilience in foreign investments in this area. Renewable Energy: The number of FDI
projects in this sector has reduced from 260 in 2015/16 to 37 in 2019/20, which indicates a
decline in foreign investment in the renewable energy industry. Software and Computer Services:
With 390 FDI projects in 2019/2020 – up from 233 in 2011/12 – this is a sector that foreign
investors have been flocking to in growing numbers.

Inward earnings data by industry from the Office for National Statistics (ONS) (from 2015 to
2020) can then help assess how profitable these sectors are for foreign investors.

46
We do statistical analysis on our ONS sourced data and find some interesting findings as depicts
in below table as well further detailed analysis id visualized in the graph coming next:

Industry 201 201 201 201 201 202 Aver Me Min Ma STD
5 6 7 8 9 0 age dian x
Mining and 1.27 1.22 0.93 1.78 0.3 -3 0.41 1.07 -3 1.78 1.59
quarrying 2 8 8333 5 8 2075
Manufacturing 8.50 9.26 9.72 11.8 8.3 3.4 8.51 8.88 3.4 11.8 2.56
3 3 8 83 2833 3 83 8523
Retail and 9.80 9.29 9.93 16.6 5.1 4 9.13 9.54 4 16.6 4.09
transport 1 7 9 68 4167 9 68 2916
Information and 4.81 1.82 4.10 6.03 5.3 2.2 4.04 4.45 1.82 6.03 1.55
communication 5 2 3 6 6 9 2 6 3551
Financial services 17.7 18.3 22.7 23.9 16.3 23.9 20.5 20.5 16.3 23.9 3.13
28 71 89 86 1233 8 86 0693
Professional and 1.85 5.07 3.62 7.93 5.4 25.1 8.16 5.23 1.85 25.1 7.79
support 2 5 2 8 45 75 2 457
Other 4.56 3.23 4.33 1.70 3.1 2.7 3.27 3.16 1.70 4.56 0.96
7 6 2 8 3833 8 8 7 6503
Table 4.7: Statistical analysis of ONS data for industry wise 2015-20

The graph shows the inward earnings of UK foreign direct investment categorised by industry
between 2015 to 2020 which is created in excel using the data from ONS.

47
 Inward earnings on UK foreign direct investment
by industry (2015 to 2020)
25
15
earnings (billions)

5
-5
ng g rt n es or
t er
r yi r in
spo atio vic p th
r tu n c er
p O
ua fa
c
t ra u ni ls su
q u a d
d an nd m ci an
an la co
m n l
g
M i na na
in ta d Fi io
in Re an es
s
M
io
n r of
at P
rm
n fo
I Industry

2015 2016 2017 2018 2019 2020

Fig 4.4: Inward earnings on UK foreign direct investment by industry (2015 to 2020) (Source:
ONS)

Financial Services: This sector has consistently been the top income earner, peaking in 2020 at
£23.9 billion, accounting for a third of all FDI earnings in the UK. Professional and Support
Services: we can see this sector increased the inward earnings from £1.9 billion in 2015 to £25.1
billion in 2020, so we can observe a notable sharp change in inflows of FDI to this industry.
Manufacturing: This sector has tailed off a bit, though still on a relatively healthy trend, with
inward earnings fluctuating between £8.3 billion (2019) and a high of £11.9 billion (2018),
suggesting that foreign investment in manufacturing is continuing. TRADE AND TRANSPORT:
There were considerable inward earnings in this sector too: waxing to a high of £16.7 billion in
2018, before plummeting to £4.0 billion in 2020, as FDI in this sector appears subject to some
volatility. Information and Communication: After a downturn in 2016, inward earnings in this
sector increased to £6.0 billion in 2018 before decreasing again to £2.2 billion in 2020 – which
suggests that this sector may be vulnerable to FDI bleeding over time. Mining and quarrying:
This sector suffered a massive hit on inward earnings – £1.3 billion in 2015 to -£3.0 billion in
2020 which could be attributed to foreign divestment in the sector or reduced foreign investment.
Other Sectors: The ‘Other’ category, which includes anything not explicitly listed, saw the lowest

48
and most volatile inward earnings. These industries may therefore not have been as successful in
attracting and retaining foreign investment as the more prominent industries.

But the pursuit of objectivity within a data-driven perspective also needs to be honest about its
own limitations. The DIT data provides valuable project-level information yet lacks information
on project value. The ONS data, on the other hand, is excellent for understanding the drivers of
profitability (via reinvested earnings – in other words, profits not paid out in dividends) but is
limited to a five-year timeframe.

In recognising limitations and conducting more research, we can look beyond single-sector
trends. Taking steps towards a more holistic approach that combines data from different sources
and unpacks what is driving changes in FDI will leave us with a far more nuanced understanding
of how Brexit is affecting foreign investment decisions in the UK. This will be far more useful
than asking whether FDI is on the increase or of the opposite outcome.

Expectations and projections for FDI

Will Brexit negatively affect the future of Foreign Direct Investment (FDI) in the UK, or will it
open doors to new opportunities? Although the outcome is difficult to pinpoint, we can look at
some of the key considerations based on available data and research.

In the longer term, the outlook for FDI in the UK is far from clear according to Springford’s
(2021) analysis of the economic impact of Brexit. He notes that ‘a recent report by a Big Four
accountancy firm, EY (2021), claimed that the UK will remain an attractive location for inward
investment despite Brexit, with the technology, life sciences and renewable energy sectors as key
prospects. That depends, however, on the UK succeeding in developing favourable trading
relationships with the rest of the world and maintaining a good business environment. Without
that, there could be further trouble ahead.’ The sharp dip in World Bank data, this time as a
percentage of GDP, illustrates that the UK has not come close to reaching the Brexit-era 2016
peak (12.08%) in 2020 at all (5.83%), and that FDI inflows are unlikely in the foreseeable future
to reach pre-Brexit levels. This inference is consistent with the finding of the EY (2021) report
that FDI inflows to the UK are unlikely to recover fully in the short to medium term.

49
Fig 4.5: Total Projects secured by Europe’s four largest recipients (2011-21) (Source: EY
European Investment Monitor, EMI 2011-20)

One is the possibility that we’ll see a reduction in the volume of FDI. Analysis by Dhingra et al
(2016) suggests that the reduction could be as much as 18-22 per cent, based on increased
investor uncertainty and disruption to trade links with the EU. Sectoral breakdowns could also
change – at least among industries that are reliant on frictionless trade with the EU, it is likely
that these would suffer a decline, and others could rise as investment goes to sectors less
affected, or even ones that stand to benefit from new trade deals. The nature of the FDI projects
undertaken could also change. It is likely that there will be an increase in the number of mergers
& acquisitions (M & A) in certain sectors, as investors seek to consolidate the market or buy
strategic assets. However, the picture is not wholly one of doom and gloom, as the movements of
FDI flows around the world are powerful indicators of the way in which global economic trends
and political stability can shape the international economic environment. A buoyant global
economy could go some way to countering the negative effects of Brexit for the UK, and the
direction of UK government policy to attract inward investment post-Brexit will be important.
These could include tax breaks, deregulation, or the creation of new trade agreements to

50
compensate for Brexit’s drawbacks and make the UK a more attractive destination for foreign
investors.

Going forward, we should track actual FDI data to see how Brexit plays out in the months after
the Brexit. We need to see if the initial projections are true. We can also track the data to see if
how the landscape is changing. And we can read sectoral industry reports and government
publications to track where FDI is going, what’s driving FDI decisions in specific industries, how
FDI is driven by, and then affects, changing regulatory frameworks. We can look at new trade
deals and their effects on FDI – if the deals pave the way to new investment targets that were
never open under the EU, we might see actual investment shift abroad in ways we’re not
expecting.

Recognising these uncertainties, taking account of global economic events, and monitoring
future data, means we can develop a sharper picture of what the future holds for FDI in the post-
Brexit UK. The success or failure of drawing in foreign capital will depend on the UK’s
willingness to navigate these uncertainties, to make itself a premier destination for international
investors, and to make the most of the opportunities from its new trading relationships across the
globe.

51
4.2 Discussion of Findings
Main Question: What has been the role of FDI in the UK's economy post-Brexit?

The impact of Brexit on net inflows of FDI to the UK can be seen most clearly in the data.
Following a spike after the 2016 referendum, the number of FDI projects moderated. This fits
with some of the existing literature on the impact of Brexit on inward investment, which
highlights a short-term spike pre-referendum in opportunistic and speculative investments that
might be anticipating benefits accruing from the UK leaving the EU (eg, Buckley et al., 2017).
The fact that there has been a decline in net inflows as a percentage of GDP since the referendum
reflects a more cautious approach to inward investment on the part of investors after the initial
euphoria of the vote.

They found that the results ‘confirm the detrimental effect outlined in previous studies of policy
uncertainty on FDI’. The dramatic swings being recorded in net increases on inter-company
accounts reflect the unwillingness of business to commit to long-term investment decisions at a
time when there was no certainty on the form that future post-Brexit regulation and trade
arrangements would take. This corresponds to the notion of ‘strategic uncertainty’ (Djankov et al,
2020), where investors weigh up the level of clarity and stability in a policy environment and
evaluate whether that is sufficient to make a commitment. Sectoral differences also emerged,
with hard-hit sectors – such as automotive and aerospace, which are heavily integrated with EU
supply chains – proving the most vulnerable, and sectors like technology and life sciences
(clearly identified by the UK government’s industrial strategy) proving more resilient. This
proves that government pro-growth policies that strengthen sectoral attractions can mitigate
some of the headwinds from Brexit that hurt FDI.

We hope our analysis has provided some insights; undoubtedly more transparent research into
these trends will be able to paint a clearer picture. First, analysis into the specific types of policy
changes – and the varying effects they have on different types of investors – could shed some
light on the differences we found. Second, it will be worthwhile to conduct more detailed
research into the dynamics of policy uncertainty – such as changes over time and whether
investors are generally better or worse at discerning the impact these changes have. Our main
concern relates to the broader ramifications of uncertainty and FDI trends.

52
To conclude, the story of FDI in the UK after Brexit is not a straightforward narrative of decline.
Instead, it is characterised by a complex interplay of mainly opportunistic initial reactions,
dampening effects of policy uncertainty after the referendum, and the intentional policy actions
of the government that shifted forms of FDI in different sectors. With the help of theoretical
insights, especially recent ones reviewed here, and with further research, we can get a better
understanding of how Brexit is changing the landscape and nature of FDI in the UK. Armed with
this knowledge, policy action can help attract desired types of investment in these uncertain
times.

Research Question 1: How have Brexit-related policy changes affected FDI in the UK?

Our findings match the existing literature on the direct adverse effect of Brexit-related policy
changes on FDI into the UK. Changes in movements on inter-company accounts have become
more volatile than in previous years, according to the ONS (n.d.), indicative of the Brexit
uncertainty effect on cross-border operations and supply chains (UK Trade Policy Observatory,
2019). The delay in investment decisions and the halt in ready-to-roll projects caused by the lack
of clarity on the regulatory and trade arrangements between the UK and the EU likely reflect
‘strategic uncertainty’, as suggested by Djankov et al (2020). Investors with a higher risk-
aversion rate are most likely dissuaded from investing in the post-Brexit environment.

The findings by Serwicka and Tamberi (2018) also provide more evidence for our finding that
policy uncertainty is a primary factor behind the decline in FDI inflows following the Brexit
referendum of 2016. Using an index developed by the Economic Complexity Observatory at
Harvard University, their work shows that, in the 24 months following the referendum, FDI net
inflows for the UK declined by 17-20 per cent, which confirms the trend we see in the DIT data:
the moderation in FDI projects two years after the spike in the aftermath of the referendum. This
suggests that the lack of clarity and predictability about post-Brexit policies was the reason why
investors became much more cautious about investing in the UK.

Our results underline that better defined and more stable policies towards FDI will make it easier
for UK government to attract more foreign investment. By reducing policy instability and
enhancing the predictability of the business environment, the UK government can create a more
conducive environment for inward investment. Future research could examine the types of
policies that have a bigger effect on behaviour and decision-making of investors. This knowledge

53
can be used to target the design of policies to stimulate long-term investment and growth. The
limitations of the ONS dataset (coverage only since 2015-20) limit a conclusion to longer-term
trends in the effect of policy uncertainty on FDI. Future studies might use alternative data or
extend the timeframe to get a clearer picture of the pattern. Through interviews with investors,
qualitative analysis might also offer more nuanced insight into the factors currently giving
investors concern over Brexit-related policy changes to their FDI decision.

Overall, our results suggest that Brexit-related policy shocks, especially those increasing
uncertainty, have adversely affected FDI in the UK. By creating clear, predictable policy
frameworks, the UK government can enhance the UK’s attractiveness to foreign investors.
Future research is needed to better understand the heterogeneity of policy changes and how they
can affect investment flows in different orientations, to better inform policy decisions to make
the UK economy more robust and investor friendly.

Research Question 2: Which sectors have experienced the most significant impacts on FDI
since Brexit, and why?

What our FDI project data reveals is a picture of two very different post-Brexit worlds. Those
sectors most integrated into EU markets and supply chains – notably automotive and aerospace –
saw concentrations of FDI decline in our analysis. Meanwhile, sectors singled out for support
from the UK government’s industrial strategy – notably technology, life sciences and renewable
energy – proved more resilient.

Two factors help to explain this sectoral difference. First, degree of integration into the EU
market and its multilayered supply chains mattered a great deal. In an industry such as
automotive, production is spread across the continent, and Brexit raised the prospect of
disruptions to the efficient operation of these supply chains. It’s likely that such uncertainty
discouraged new investments, which couldn’t be undertaken without clarity on the new rules of
cross-border operations. Second, we need to factor in the UK government’s strategic objectives
for FDI. The UK government has been targeting specific sectors, such as technology and life
sciences, in its effort to compensate for the negative impact of leaving the EU. It is possible that
Brexit generated optimism about new trade deals with non-EU countries. This in turn could have
boosted investor confidence in the UK for FDI in high-end sectors.

54
Though our results are in line with the OECD’s (2020) results, a more differentiated picture can
be gained by a look at additional drivers that produce differences along the sectoral dimension
(e.g., government regulations in specific sectors such as tax rebates for firms or less stringent
environmental policies, or the potential for new trade deals with non-EU countries and their
impact on specific sectors). A more detailed view on these determinants can lead to targeted
strategies of FDI attraction for sector-specific needs.

An important limitation of our data, presented in the sectoral breakdown, is that the information
shows the number of projects, though not necessarily the overall investment value, which might
not fully capture the allocation of resource flows in different sectors. The timeframe of the data
might also limit the ability of our findings to capture the true extent of Brexit’s impact on
resource allocation across sectors as certain investment decisions might not emerge right away.
In future studies, data on investment value might be used to supplement the picture and the
timeframes could be extended to capture the possible impacts in the longer-term. Ultimately,
Brexit has led to increased FDI in some sectors, decreased it in others economic diversification
as the post-Brexit world continues to change.

Research Question 3: What are the expectations and projections for the role of FDI in the UK
economy moving forward?

The long-term prospects for post-Brexit FDI in the UK are a matter of conjecture. Springford’s
(2021) report on the economic consequences adds weight to this question mark. Interestingly, a
recent study by the consultancy EY (2021) estimates that the UK has a ‘incredibly high chance’
of retaining its status as an FDI location, pointing to sectors such as technology, life sciences and
renewable energy as more likely to weather a Brexit outcome than, for instance, automotive and
aerospace. But the balance rests on a series of ‘ifs’, many of which are still evolving.

The UK government’s ability to master the policy terrain will play a big part in determining the
flow of FDI in the future. Committed policies, along with clear, stable, and forward-looking
directions – a refrain we heard throughout our analysis – will be essential to attracting long-term
investments. Firms making large-scale commitments need to understand the rules of the game
and be confident they can play. The government will also need to make sure that the new trade
deals it signs with third countries are favourable. The new relationships can both create new
markets and quickly incentivise investment in those sectors that stand to benefit most from these

55
deals. The success of the government’s industrial strategy – focusing on high-value sectors such
as technology and life sciences – might well depend on the ability to embed it in and leverage the
new trade partnerships.

Together with the World Bank data showing a significant drop in FDI net inflows as a share of
GDP, this indicates there might not be an immediate return to pre-Brexit levels. This is also the
conclusion of EY (2021), which projects a possible short-to-medium-term slowdown of FDI
inflows, albeit anticipating a favourable turn in the trend over the longer term. Nevertheless, our
analysis shows that the attractiveness of the sectors highlighted here, most of them consistent
with the government’s industrial strategy, will continue to be an important incentive for FDI in
the UK. Investors are likely to pursue a more diversified FDI profile in the country, with target
sectors less dependent on the EU market and greater importance given to growth sectors.

Data-driven understandings are undoubtedly useful, but an extra layer of insight can be achieved
if we look beyond the numbers. By understanding the precise decision calculus of foreign
investors in a post-Brexit environment, we can develop awareness of the incentives they’re
currently weighing. Qualitative studies – for instance, interviews with investors – could provide
colourful insights into how investors view the UK’s investment climate. Such studies could
probe whether policy uncertainties linger after the Brexit vote and how well-placed the UK is to
compete with other destinations in a new post-Brexit world if we do secure the best deal for
ourselves in the world economy. To the extent that there’s such a thing as Brexit anxiety, this
insight might enable policymakers to fashion tailored policies and communicative strategies that
assuage it. What the UK’s strengths as an investment location are – and the extent to which
they’re slipping away – can be a matter of interpretation.

The story of what next for FDI in the UK, in the aftermath of Brexit, is still to be written. To
what extent will government policy support, or constrain, inward investment? How will the new
trade deals develop? How will the UK seek to maintain a competitive business environment in
the years to come? The UK will be better placed to compete for FDI if it is able to understand
that underlying FDI data tell only one part of the story. To protect and increase FDI flows into
the UK, both government and business need to be clear-sighted about the myths of FDI and keep
their focus on the opportunities identified above. With a strong appreciation of UK strengths, and
ongoing efforts to create a predictable investment environment, it is vital that data is collected

56
alongside the qualitative views of investors throughout the country. The more we collect, collate,
and jointly interpret this information, the better placed we’ll be to make evidence-based policy
decisions, and the more likely we’ll see a diverse UK economy emerge in the years to come.

57
 Chapter 5: Conclusion and Recommendation

5.1Summary of Main Findings and Implications

This part jumps into the critical important points from the examination of FDI in the UK led in
Chapter 4, investigating their importance for policymakers, organizations, and future exploration
attempts.

Brexit’s effect on net inflows of FDI to the UK is most concretely demonstrated by the findings
we conclude in Chapter 4. In the aftermath of the 2016 referendum, there was a spike in FDI
projects, then they moderated. This literature identifies a spike in inward investment prior to the
referendum – e.g., opportunistic, speculative investment possibly anticipating benefits accruing
to the UK from leaving the EU. The decline in net inflows as a percentage of GDP since the
referendum reflects a more cautious approach to inward investment on the part of investors once
the euphoria of the vote has died down. Compared with the existing literature, the results of this
study are consistent with the broad observations of that literature. Similar Trend was found by
Dhingra et al., 2016 that the data might show that the net inflows of FDI into the UK, overall,
was reduced by 22% in the 2 years following the date of the Brexit referendum. Serwicka and
Tamberi (2018) and the UK Trade Policy Observatory (2019) also observed the similar effects of
Brexit-related policy uncertainty on FDI inflows to the UK, especially for those sectors most
dependent on the single market. The results confirm the detrimental effect identified in the
previous studies of policy uncertainty on FDI’. The sizeable net increases being registered on
inter-company accounts reflect the fact that business is unwilling to commit to long-term
investment at a time when there was no certainty about the shape of future regulation and trade
arrangements after Brexit. This also echoes the concept of ‘strategic uncertainty’ where investors
weigh up the clarity and stability of a policy environment and decide whether this is good
enough to make a commitment.

Analysing these data further reveals important insights into the impact of Brexit on how FDI is
distributed among different sectors of the UK economy. FDI data analysis could also show shifts
in investment into different sectors from inward investment (e.g., technology or healthcare rising,
financial services or manufacturing declining). This has implications for organisations that
operate in affected sectors as a growth in FDI in a sector would create new opportunities in that

58
sector (e.g., for export companies who can connect to new buyer markets) while a decline might
become a constraint (Davies, 2021). Policymakers seeking to promote certain sectors can also
use these insights to design strategic investment programmes. My research offers a better
understanding of how Brexit might reshape investment patterns in different sectors of the UK
economy and help policymakers to frame strategies to further the government’s priority sectors
agenda. For example, other comparative analyses examining the consequences of Brexit on
investment across Europe in different sectors of the economy, such as those run by Deloitte
(2020), similarly inform us about how these consequences unfold in different parts of Europe
and suggest appropriate policy responses. Furthermore, sectoral disparities in the resilience of
FDI flows have been identified similar behaviour by the OECD (2020) and Regeneris Consulting
(2019).

Another aspect of our study relates to Brexit’s effect on the nature of FDI, as we investigate
changes in the structure of new investments visa mergers and acquisitions. Using the DIT data
(refer to Chapter 4), we have found an increasing share of new investments in comparison with
M&A deals after the Brexit referendum. These findings can shape the strategy of foreign
investors related to the entry strategy in the UK in the post-Brexit era. For instance, new
investors might be more risk averse due to increased uncertainty, and this can result in an
overweight of new investments to riskier and relatively more volatile investment activity in the
UK such as (leveraged) buyouts. As long the same lines, the findings highlight the importance of
monitoring the nature of FDI as it serves as an instrument to detect changing investor behaviour
because of the Brexit vote and, therefore, tailor policies accordingly. By clarifying how Brexit
might influence the types of foreign investment activity taking place in the UK, this study can
shed light on policy issues and the expectations of investors.

Finally, our evidence provides a better understanding of the complexities surrounding the impact
of Brexit on FDI in the UK. Understanding the economic and policy implications of these results
would inform policymakers, businesses, and future research. This paper continues the dialogue
regarding the impact of Brexit on FDI flows and sheds light on its complexities. It also opens
opportunities for further research on other dimensions of this relationship.

59
5.2Contributions of the Study
This was, not just research in the sense that it is explaining the phenomenon – ie, how much it is
affecting FDI in the UK – but also impact research based on professional practice and academic
knowledge.

For example, policymakers can use this research to improve policies that aim to attract and retain
FDI in a post-Brexit Britain. Or analysing migration trends related to changes in investment can
help to inform the development of sector-specific policy initiatives to support sectors that are
increasing or moving to a decline. For businesses operating in the UK, this research can indicate
the potential of changes in the portfolio of FDI projects. By understanding how patterns of
investment are increasing, decreasing, or changing within and across investments, the study
allows them to shape their business strategies accordingly.

This explains the multiple implications of Brexit on FDI in the UK as documented in this
research and shows that, by going beyond reporting what is happening (as has been done in the
other literature), and by analysing the economic and policy implications of the recorded shifts
this allows for a deeper understanding and explanation of the Brexit-related FDI shifts.
Moreover, this integrated data-analysis (combined with DIT, ONS and the World Bank data)
allows for new research avenues that could be used in future investigations of FDI with the aim
of improving the overall picture and a more balanced view on FDI developments and challenges
compared to just using administrative data (e.g., DIT).This adds to prior knowledge on the
impact of political events on FDI, and, in particular, to prior knowledge on the impact of the
specific event of Brexit where this paper looks at FDI in the UK as it unfolded, as well as
contributes to the literature on how political uncertainty impacts FDI (eg, Javorcik et al, 2020).

Overall, this work therefore has a valuable translational role in translating academic research into
advice for policy and practitioners alike. It might offer insight to government (in devising a new
FDI regime in the wake of Brexit) and to business (in understanding their customers overseas at
a time of reform to the UK’s FDI regime). More broadly, it adds to our understanding of the
ways in which political events inform FDI decisions, with wider implications for how we
understand the role of geopolitics in shaping the global political economy.

60
5.3Limitations of the Study
While this research offers valuable insights, it's important to acknowledge some limitations:

Data availability: This was a secondary analysis of data available from DIT, ONS and World
Bank. This enabled a broad overview of investment choices and FDI in the UK but, on the other
hand, could have limited the quality of the data: for instance, lack of information about the DIT
project value could have allowed deeper analysis of trends in the UK investment.

Periodicity of data: Part of the analysis would be constrained by the timing of the data: for
example, the sectoral breakdown of inward earnings by industry would deal only with 2015-20
compared with, for instance, personal consumption expenditure in the second quarter of 2021.
This would ignore the impact of Brexit (2016).

Emphasis on the relationship between Quantitative Analysis and FDI Decision: the study was
limited to only the quantitative analysis of the trends of FDI. This method of study provides
valuable insights, but it does not capture the degree of qualitative factors that assist in decisions
on FDI. As Brexit is a complex situation that may cause mixed sentiments among investors, it
would also be useful for the study to include qualitative data, like interviewing key decision
makers, to analyse the outcomes.

These limitations point to possible areas for improvement in future studies, and this general note
will help to evaluate the research more freely and critically. It will help to transfer the emphasis
towards a conclusion summing up the main findings. Some deficiencies that may be addressed in
future or new research may include the use of different data sources. It may also be accomplished
by extending the time of analysis or via qualitative research methods that will enable an even
more profound understanding of FDI in the UK in the aftermath of Brexit.

5.4Recommendations
The findings from this study are of value for policy and business decision-makers, as well as a
source of information for future investment studies after Brexit.

Similarly, it can help policymakers design their investment-oriented policies (e.g., subsidies or
relaxing of regulation) of those sectors in which the inward foreign direct investment (FDI) may
be on an upward trajectory. Policymakers must also continually and closely track the trends in

61
FDI, i.e., the volume, nature and sectors that receive the highest inflow of FDI. The government
could create a separate taskforce or work with various key stakeholders such as trade
associations and track the dynamics of FDI and its economic gains and losses. Once the
government provides clarity about key provisions in a post-Brexit deal and regulates in a
predictable manner, investor concerns, including the concerns of financial firms, about Britain
turning more turbulent and unstable will diminish.

Businesses can shape their strategies to respond to the morphing contours of FDI by investing in
the sectors which are growing in terms of FDI; or by producing products and services that appeal
to the changing tastes of foreign investors. Businesses can bolster their chances of engaging with
foreign investors by signalling to them more proactively. By learning what investor concerns and
what are the factors they look at when determining whether to invest in a certain location in the
post-Brexit world, this can be a useful skill in attracting and retaining foreign business capital.

Other research could study FDI flows into sectors separately and determine more precisely the
impact of Brexit on FDI inflows. Other research could shed a more detailed, qualitative
understanding of the barriers and opportunities of Brexit by using case studies or interviewing
key stakeholders. FDI decisions are complex, with non-economic factors often important
motivators of FDI, alongside economic factors. Further research could identify the relative
importance of political stability, the regulatory environment or availability of a skilled workforce
in shaping post-Brexit foreign investment decisions. Comparisons with other countries
undergoing similar political or economic changes can also provide us with a more general
understanding of what drives FDI patterns across countries. If these recommendations are taken
up by all parties, the UK will remain an investment paradise post-Brexit.

62
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Appendix
Appendix A - Meeting records template
STUDENT RECORD of MEETING with SUPERVISOR
Dat Review Topics Identificatio is is Action Student Superviso
e of discusse n of issues progres progres s for signatur r
actions d s Are s Are Next e signature
from goals goals meetin
last Actions Actions g
meetin for next for next
g being being
made? met?

Yes/No Yes/No

Supervisory meetings can be conducted electronically or by phone, and agreement by email is

accepted in lieu of signatures.
Students should complete, sign and date the form, and forward to the Supervisor. The Supervisor
should add their name and date if in agreement, and retain this form as a formal record of
meetings with the student. Students should submit the completed form as an Appendix in their
final Project Report submission.

Signed Ethical Form

Your Details
Name of Student: Junaid Hassan Mand
Department: Gcu London School Office
Programme: Msc International Management and Business Development (London)
Academic Session: 23\24
Supervisor: Dr Akinwalere, Susan

70
 The Project
Project Title: The role of Foreign Direct Investment (FDI) in the UK Post-Brexit
Main Aim of Study: To analyse the transformation in the role and patterns of FDI in
the UK following Brexit.

Contact with Others

Will your project bring you into direct or indirect (e.g. via internet surveys) contact
with other people?
Yes
If you have clicked “No” sign the section below and submit this page only to
your supervisor for countersigning, otherwise complete the remainder of the
form.

Your Signature

Signature: J. Mand Date submitted: 16-05- 2024

Ethical Approval
(To be completed by supervisor)

I have checked the above for accuracy and I am satisfied that the information
provided is an accurate reflection of the intended study.

There are no ethical issues causing me concern:

Signature: Date:
16/05/24

71
 Research Participants

Number of Research Participants in your study: The exact number is not specified,
but it would include a range of experts from various fields related to FDI and Brexit.
Who are the Research Participants? Economists, business analysts, policymakers,
and corporate representatives with expertise in FDI in the UK.
On the basis of which criteria have they been selected? Selected based on their
experience and expertise in FDI studies, offering a variety of perspectives on the
post-Brexit influence on FDI.
Where and how will you recruit them for your study? The specific recruitment
method is not mentioned but likely involves reaching out to professionals in the
relevant fields through professional networks or institutions.
Where and how will data collection take place (location, by phone/internet, by
post)? The interviews are likely to be conducted either in person, via phone, or
through the internet, considering the professional status of the participants.
Will any of the Research Participants be minors (under 16 in Scotland, under 18 in
the rest of the UK)?
No
If you have clicked “Yes” please note the following:
You must read the further guidance available on the School’s Ethics website
You will need to obtain a PVG Disclosure (https://www.mygov.scot/pvg-scheme//)
This Ethics form, to which a copy of the disclosure must be attached, will need
to be countersigned by a member of the School’s Ethics committee
Please click here to indicate that you have understood these requirements ☑️

Methods of Data Collection to be Employed

Paper-based questionnaire No
Internet survey No
Interviews Yes
Focus Groups No

Other (please specify):

If you wish to guarantee internet survey respondents anonymity you must follow the
requirements laid out in the Survey Monkey document available on the School’s
Ethics website (if you are using internet survey software other than Survey Monkey

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follow the same procedures for that software): please click here to confirm that you
have read this document and will abide by its requirements:

73
 Confidentiality

Requests for confidentiality can only be accepted on the understanding that the
confidential material will not be included in the written report or dissertation. They
cannot be accepted on the understanding that the report/dissertation itself will be
confidential. British universities are public bodies and all research carried out at
undergraduate/taught masters level is by definition available for public scrutiny.

Please click here to indicate that you understand the limits to confidentiality in
relation to your research ☑️

Potential Participant Distress

Is there any possibility that any of the procedures in your study will cause
discomfort, anxiety, stress or embarrassment for your participants?
No

If you have answered "Yes" please describe, explain and justify how you will seek to
minimise upset to your participants:

Please indicate your response to the following questions and

discuss your response with your supervisor
Will you provide an oral explanation of the project to the
subject? Yes
Will you provide a written explanation of the project to the
subject? Yes
Will you ask the research participants to complete a consent
form? Yes
If you have clicked “Yes” to the above please attach a copy (drafts are acceptable at
this stage).
If you are seeking verbal consent please provide a statement of how you will seek to
gain this from your participants:

Will you explain to the participants that you are a student

undertaking degree or masters level studies? Yes
Will you explain to the research participants that they may not
benefit from your study? Yes

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Will you offer the research participants the opportunity to
decline to take part? Yes
Will you offer the research participants the opportunity to
withdraw at any stage? Yes
Will you offer anonymity? Yes
Will you adhere to the provisions of the Data Protection Act
2018? Yes
Please briefly explain how the DPA will be adhered to:
(see https://www.gcu.ac.uk/dataprotection/)

Your Own Safety

Are there any aspects of your project which might have implications for your own
safety?
No

If you have clicked “Yes”, please indicate how you propose to minimise any risk to
yourself:

Check List
Please tick the supporting documents you are submitting along with this application
Participants Explanation form Yes☑️ No N/A
Consent form (draft acceptable) Yes ☑️ No N/A
Questionnaire/survey text (draft acceptable) Yes ☑️ No N/A
PVG Disclosure Yes No ☑️N/A

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 Your Signature

Signature: J. Mand Date: 20 March 2024

Please also type name here: Junaid Hassan Mand

Ethical Approval
(To be completed by supervisor)

I have checked the above for accuracy and I am satisfied that the information
provided is an accurate reflection of the intended study. I confirm that the form
contains all the relevant information and that all supporting documentation is
attached.

There are no ethical issues causing me concern

Signature:
Date: 16/05/24

Please also type name here: Dr Susan Akinwalere

If you have clicked the second option please forward to your departmental
representative on the School’s Ethics committee for further consideration.

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