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The Brexit game: uncertainty and location decision

Author

Listed:
  • Douglas Silveira
  • Izak Silva
  • Silvinha Vasconcelos
  • Fernando Perobelli
Abstract
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. Este artículo tiene por objeto analizar las decisiones de localización de las empresas como respuesta a Brexit. En el artículo se combina la teoría de juegos evolutivos y los enfoques de simulación espaciales basados en agentes con el análisis de input–output, con el fin de evaluar dos sectores diferentes: i) la producción de cultivos y animales; y ii) las actividades de los servicios financieros. Se desagregó la Unión Europea en múltiples regiones y se consideraron los siguientes factores en la toma de decisiones: i) el potencial de mercado; ii) la integración productiva; iii) los costos de la mano de obra y iv) el costo del desplazamiento. Las empresas asignan un valor ponderado a cada uno de estos factores. Los resultados sugieren que en los sectores tradicionales las empresas tienden a buscar mercados no saturados. En los sectores relacionados con los servicios, cuanto mayor sea la incertidumbre, mayor será la probabilidad de que las empresas se trasladen. 本稿では、ブレグジット問題に直面した際の企業の立地決定を分析する。我々は、進化ゲーム理論と空間的エージェント・ベース・シミュレーションのアプローチを産業連関分析と組み合わせて、農畜産物製造と金融サービス業の2つの異なるセクターの評価を行う。欧州連合を多様体の地域(manifold region)に分割し、1)市場としての可能性、2)生産性統合、3)人件費、4)移転費用、の意思決定における4つの因子について検討する。企業は以上の因子のいずれも重要視している。結果から、伝統的セクターの企業は飽和していない市場を探す傾向があることが示唆される。サービス業に関連するセクターでは、不確実性が大きければ大きいほど企業の移転の確率が高くなる。

Suggested Citation

  • Douglas Silveira & Izak Silva & Silvinha Vasconcelos & Fernando Perobelli, 2020. "The Brexit game: uncertainty and location decision," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1515-1538, December.
    • Handle: RePEc:bla:presci:v:99:y:2020:i:6:p:1515-1538
    DOI: 10.1111/pirs.12550
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