MNCs: The Aftermath of Brexit

As the world has become more and more globalized, so too have multinational corporations. They are loyal to themselves as companies rather than to the countries that play home or host to them. MNCs have the ability to operate in their own self interest and have continuously become less reliant on national ties and affiliations. Nowhere is this more clear than in the behavior of corporations following the Brexit Referendum.

The uncertainty of what will happen to the UK when they leave and if they will leave with or without a deal with the EU has caused hundreds of companies to relocate. As a no-deal Brexit becomes more probable and the deadline to withdraw from the EU looms closer, companies continue to leave the UK in favor of locations with more certainty. This is one of the driving forces of MNC decision making when it comes to Brexit. There is no certainty about what kind of trade deal the UK will get or if they will get one at all which has made companies reevaluate their operation there. Even if there was a comprehensive trade deal lined up with the EU, companies are unwilling to take on the potential costs of basing their operations outside of the EU. Moving operations out of British borders is a cost many companies with rather incur than staying in the UK and waiting to see how Brexit plays out.

Although it’s not quite the same, this pattern of MNC behavior follows the logic of the Ownership, Location, Internalization Theory. Companies foresee raised costs in Great Britain and so they have chosen to move their operations to another location. By moving, they can avoid the long term costs of operating in Europe but outside of the EU and give themselves greater certainty in the wake of Brexit.

Even when the deadline was far off and the thought of a no-deal Brexit was far from likely, companies were fleeing the UK and setting up operations throughout the EU. One of the most popular destinations for these companies has been the Netherlands. Rather than wait and see how the final result plays out, MNCs have strategically acted in their own interests and at the cost of the British economy. Not only are companies such as Sony and Barclays deciding to move their headquarters out of the UK, many are moving manufacturing operations elsewhere as well. This will result in a significant loss of British jobs and a blow to the national economy. However, in the globalized world, this is not an issue for MNCs. They would rather see their own operations running smoothly than be responsible for the economic well-being of just one country. Remaining in the UK means taking a risk that they could lose access to the EU market and the behavior of MNCs has shown that that is not a risk many are willing to take.

Stone, Jon. “Dutch Government Says over 250 Companies in Talks about Relocating to Netherlands Because of Brexit.” The Independent, Independent Digital News and Media, 24 Jan. 2019,

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