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

This paper stems from a collaboration between researchers from Politecnico di Milano, Invest Europe, and the EIF. It represents a joint effort examining how Brexit influenced cross-regional venture capital (VC) investments between UK and EU hubs. Using a comprehensive dataset covering over 35,000 startups and 2,800 VC firms from 2007 to 2021, the study maps VC flows at the level of Functional Urban Areas to assess broader regional shifts.

The analysis finds that UK VC hubs reduced their cross-border investments immediately after the Brexit announcement, while EU hubs only adjusted their strategies at first and then increased their investments toward the UK. This asymmetric response highlights how political uncertainty and institutional changes can disrupt established investment patterns. The study underscores the need for policymakers to monitor the resilience of cross-border investment channels and to consider how regulatory clarity and timely information can support a stable financial ecosystems during periods of transition.

This paper is part of the ongoing work of the Impact Assessment division to support the EIF’s transition to an impact-driven institution by designing and implementing a comprehensive Impact Assessment Framework. This collaboration reflects our efforts to cooperate with external researchers, provide access to high-quality data, and contribute to a broader understanding of how policy and institutional change shape the financial ecosystems.

The paper has been originally published on Research Policy.