Political, economic and research disintegration: The impact of geopolitical uncertainty on cross-border R&D collaborations and innovation

Uncertainty regarding the policy environment could be particularly detrimental for 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 exit from the EU as a quasi-natural experiment in a Difference-in-Difference (DiD) analysis. Our results reveal a significant disruption in cross-border research collaborations of UK organisations after the Brexit referendum, as EU based inventors were replaced by UK ones. This has resulted in a shift in the field of technologies patented, and in a decrease in inventions patented overseas. Overall, the disruption has negatively affected the innovations of UK based organisations, reducing both the number and quality of patents.