Premium
The Brexit game: uncertainty and location decision
Author(s) -
Silveira Douglas,
Silva Izak,
Vasconcelos Silvinha,
Perobelli Fernando
Publication year - 2020
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12550
Subject(s) - brexit , european union , production (economics) , service (business) , economics , displacement (psychology) , microeconomics , industrial organization , business , international economics , marketing , psychology , psychotherapist
This paper aims to analyse firms' location decisions when faced with Brexit. We combine evolutionary game theory and spatial agent‐based simulation approaches with input–output analysis to evaluate two different sectors: (i) crop and animal production; (ii) financial service activities. We separate the European Union in manifold regions and consider the following factors in the decision making: (i) market potential; (ii) productive integration; (iii) labour costs and (iv) displacement cost. Firms assign weights to each of these factors. Our results suggest that in traditional sectors firms tend to seek unsaturated markets. In sectors related to services, the greater the uncertainty, the greater the likelihood that firms will move.