4/2026 Enrico Vanino, Mustapha Douch, Ismail Çakmak. Political, economic and research disintegration: The impact of geopolitical uncertainty on cross-border R&D collaborations and innovation
Working Papers of Eesti Pank 4/2026
Uncertainty regarding the policy environment could be particularly detrimental to innovation, as it requires high-risk investment and long-term commitments with scientists and research partners. This paper focuses on the effects of geopolitical uncertainty on cross-border R&D collaborations and patenting activity, exploiting the UK’s exit from the EU as a quasi-natural experiment in a difference-in-differences
(DiD) analysis. Our results reveal a significant disruption to the cross-border research collaborations of UK organisations after the Brexit referendum, as EU-based inventors were replaced by UK-based ones. Overall, this disruption has negatively affected the innovation output of UK-based organisations, reducing both the number of inventions patented overseas and their quality.
