Reference no: EM131492738

Following a referendum held on 23 June 2016, in which 52% of votes cast were in favour, the UK has been putting on a course to leave the EU by March 2019. It is now well known as 'Brexit'.

The impact of Brexit is rather significant and various. The UK is the largest recipient of FDI in the EU. It is suggested Brexit could reduce the attractiveness of the UK as a gateway to Europe. It could also lead to a reduction in investment from the rest of the EU, which is the biggest source of FDI in the UK.

You are required to answer the following relevant questions:

(1) What are the benefits and risks of FDI? Describe the development of FDI in the UK since UK joined the EU in 1973.

(2) Since the announcement of Brexit, the rate of British pound against other major currencies,e.g. US dollar and Euro, has been falling. What is the impact of weak pound on UK economy? Assume other things hve been equal.

(3) With references to relevant literature, evaluate the impact of Brexit on FDI in the UK.

Note:

• Word limit 2,000 words
• Using real examples in order to illustrate your argument is highly appreciated, while they must be chosen from reliable resources and referenced appropriately.
• As well as covering the standard textbook approaches you will need to draw information from other theoretical and empirical studies contained within sources such as specialist books and academic journals.