Introduction

In Do they do as they say? Analysing the impact of Brexit on Relocation Intentions in the UK's FinTech industry, Sohns and Wójcik (2022) deliberate what they call the "interplay" of different Brexit strategies, with comparison of management rationales and relocation results for insights into the complex relationship of strategic firm decisions in the context of protectionist trade policy reinstatement. The study's dynamic model evaluating the decision science behind those strategies is a mixed methods approach designed to capture the aggregate effects of diversified behavioural and resource reflationary models.

Background: A Study of Firm Geography

The study follows Bathelt and Glückler (2003) and Strauss (2008) in analysis of "context-specific strategic decision-making by economic agents believed to be at the core of economic geography" (Sohns & Wójcik, 2022). Application of a factorial survey approach in the study permits analysis of an economic geography where strategic behaviour is having significant impact for political economy under uncertain conditions. Specifically, Brexit is understood as a defined period of risk that can be subject to a mixed-method approach designed to interpret whether firm relocation intent is driven by the same factors as actual relocation behaviour. In the study, it is assumed that managers monitor the business environment for change and make deliberate strategic decisions based on potential opportunities or threats.

Firm Strategy In the Event of Deal or No-Deal?

The findings of the study "underscore the impact of political uncertainty on corporate decision-making," as viewed in other replicable models analysing the gap between intent and decision (Carrincazeaux & Coris, 2015; Pellenbarg et al., 2002). Key outcomes of the study indicate Brexit having significant impact on the relocation of UK FinTech firms. Results show that more than a quarter of the company representatives surveyed aimed for EU relocation in the event of a "no-deal" Brexit, with the likelihood for partial relocation higher. Significantly fewer representatives anticipated relocation under a deal scenario.

Relocation or Dissolution?

A range of relocation intentions cited in the study of Brexit fintech firms, mention national background of a company's founders, and company size to be deciding factors for relocation to the EU (Sohns & Wójcik, 2022). UK firms participating in the study confirmed there to be a moderate (66 percent) to high (84 percent) correlation response between the intentions and outcomes of actual relocation strategies, whereby 39 percent opened new offices abroad, while about 13 percent of established firms fully dissolved. The authors indicate discrepancies in firm behavior may reflect external issues such as an unexpected growth forecast or differing internal characteristics of the firm itself like its operational structure or financial position complicating a relocation decision.

Implications for Future Research

When analysing a sector that largely relies on the application of recently innovated digital technologies for performing financial transactions, there are specific sectoral factors to consider (Sohns & Wójcik, 2022). The authors recommend decision modeling based on simulation comparisons rather than static characteristics present within the business environment. Behavioural, relational, and even emotional factors are considered within the study, yet there is limited attention to the standard empirical framework applied in managerial decision science. The standard revenue-based approaches (i.e., benefit-cost analysis and breakeven analysis) normally applied to public policy driven, managerial decisions of the sort proliferating the UK business environment during Brexit, greater focus on risk to the bottom line would perhaps be more convincing.

References

Bathelt, H., and Glückler, J. (2003). Toward a relational economic geography. Journal of Economic Geography, 3(2): 117–144.10.1093/jeg/3.2.117Search in Google Scholar

Carrincazeaux, C., and Coris, M. (2015). Why Do Firms Relocate? Lessons from a Regional Analysis. European Planning Studies, 23(9): 1695–1721.10.1080/09654313.2015.1048186

Pellenbarg, P.H., van Wissen, L.J.G., and van Dijk, J. (2002). Firm relocation: state of the art and research prospects. Groningen: University of Groningen, SOM research school.10.4337/9781781950746.00012

Sohns, F. & Wójcik, D. (2022, Aug 14). Do they do as they say? Analysing the impact of Brexit on Relocation Intentions in the U's FinTech industry. ZFW – Advances in Economic Geography. https://doi.org/10.1515/zfw-2021-0049