PRECONDITIONS OF SUSTAINABLE ENTREPRENEURSHIP: ESTIMATING OF BREXIT SCENARIOUS IMPACT ON MACROECONOMIC ENVIRONMENT

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PRECONDITIONS OF SUSTAINABLE ENTREPRENEURSHIP: ESTIMATING OF BREXIT SCENARIOUS IMPACT ON MACROECONOMIC ENVIRONMENT

Journal Title: Polish Journal of Management Studies - Year 2018, Vol 17, Issue 2

Abstract

Sustainability of entrepreneurial activities is determined on array of factors. Smart, skillful management remains among the most important preconditions of successful development of financially healthy business enterprise. Ability to foresee and react to changing external environment remains one of the most important functions of management. In order properly react to changes in external environment, those changes have to be perceived, alternative scenarios taken into account. This paper is devoted to analysis of impact of Brexit on macroeconomic environment of UK and other countries, which inevitably are related to UK in this globalized word. There is a lot attention to Brexit implications in the recent literature (e.g. (Tol 2018; Oliver and Williams 2018; Henökl 2018; Aristeidis and Elias, 2018; Brakman et al., 2018; Bergin et al., 2017; Bachtler and Begg, 2018; Samitas et al., 2018). In the presented research we distinguish and focus on two alternative scenarios: Light Brexit and No-deal Brexit. ”Light Brexit“ assumptions are as follows: “Under pressure from more pro-EU factions in parliament and growing concerns over the costs of a hard Brexit, the British government softens its negotiating positions on immigration control; the EU agrees to some UK restrictions on immigration from Eastern Europe for a few more years, while preserving all rights of existing EU citizens in the UK and eventual restoration of free movement from the EU to the UK; this allows for a compromise, in which the UK retains access to the common market and financial sector rights. UK citizens also retain full EU movement and immigration rights. Estimated probability varies between 5-15% “ (Passport 2018). The second, “No-deal Brexit” scenario is being based on the following assumptions: “Negotiations between the EU and the UK break down, and the UK leaves the EU in 2019 without reaching a trade agreement; trade relations with the EU default to World Trade Organization (WTO) conditions; heightened uncertainty and lower labor productivity lead to a long-term decline in UK real GDP of around 3% relative to the baseline forecast. Estimated probability is between 25-35%“ (Passport 2018). Impact of each scenario on real GDP growth, disposable income of various income groups of UK is being provided, juxtaposed and economically interpreted. The paper provides insights, which may have both, theoretical and practical implications, and be of interest to policy makers, practitioners and business companies, operating within and outside of UK.<br/><br/>

Authors and Affiliations

Manuela Tvaronavičienė

Keywords

entrepreneurship external environment Brexit scenarios real GDP growth

EP ID EP305932
DOI 10.17512/pjms.2018.17.2.19
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