The effects of Brexit on businesses : a comparative study on pre-Brexit and post-Brexit expectations

Abstract

The vote in favour of Brexit created a dilemma for those involved in the business industry across the EU, provided that the ‘Brexit’ vote implied the UK to exit the Union, and it would be pursuing a future withal the EU. Before the UK and EU reached an agreement in 2020, many businesses were hesitant on how Brexit could impact their business, as this change has shocked many industries. The purpose of this dissertation is to examine the concerns of businesses in the pre-Brexit period, compared to the post-Brexit sentiment. In this study, the author aims to delve deeper on the impact of Brexit on businesses and highlight the differences and effects that it has brought to these firms. This study will focus on three main important areas, the pharmaceutical industry, the tourism industry, and the retail industry within the context of the Maltese firms. This research adopts a secondary quarterly data, taking into consideration a 10-year period from 2010 to 2020. Indeed, the study evaluates the businesses approach pre-Brexit and post-Brexit by analysing the data obtained and also adopting a Chow test for structural breaks to better understand the single structural breaks in series. The aforementioned time period encompasses the decisions and several discussions that led to the final decision of the UK leaving the EU, and the period in which Brexit came into effect. Following the analysis of the said data within the Maltese market, it was possible to arrive to several conclusions that the impact of Brexit had no great influence on Maltese firms. Withal, the repercussions of Brexit are still being felt by businesses and the economy, in addition to a number of other social and political challenges that persisted even as Brexit was taking place. Finally, the impact of Brexit present within the Maltese economy implies that other Maltese industries can and could be experiencing similar behaviour.