How Brexit reshaped venture capitals market: An analysis of UK and EU investments

Andrea Odille Bosio, Vicenzo Butticè, Andrea Crisanti, Annalisa Croce, Simone Signore

Research Policy · 2025 · Volume 54 · Issue 8

DOI: 10.1016/j.respol.2025.105289

Abstract

This study examines the distinct impacts of Brexit's announcement and enforcement on cross-region VC investments between the UK and the EU. The findings reveal contrasting trends for VC hubs in these regions. Following the Brexit announcement, UK VC hubs immediately reduced their investments in the EU, with no further changes after enforcement. Conversely, EU VC hubs did not alter their investment behavior toward the UK at the announcement but significantly increased their activity after Brexit enforcement. These results align with the hypothesis that UK and EU VC investors faced asymmetric uncertainty, with the EU being less equipped to anticipate how Brexit would reshape European VC markets. Our analysis is the first to offer a picture following Brexit enforcement, showing that, overall, UK VC hubs reduced their incidence on the EU market as well as in the domestic market.

Keywords

Brexit, Financial hubs, Startups, Venture capital

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