A recent study by the London School of Economics (LSE) Centre for Economic Performance (CEP) finds that, controlling for many other factors, FDI to the UK would be about 22% lower following the UK leaving the EU.

The LSE's Centre for Economic Performance has noted: ''It is unclear whether there are substantial regulatory benefits from Brexit. The UK already has one of the OECD's least regulated product and labour markets. 'Big ticket' savings are supposedly from abolition of the Renewable Energy Strategy and the Working Time Directive (WTD)145 - both of which receive considerable domestic political support in the UK''.

Given the weight of the evidence, including the recent study by the LSE's Centre for Economic Performance (CEP), a modelling assumption for an effect on non-EU FDI flows has been made to ensure the impact on total FDI inflows into the UK is captured as a result of leaving the EU in all the alternatives. In terms of the modelling, the analysis has made an assumption that the impact of EU membership on non-EU FDI flows is the same as for EU FDI flows.

Recent empirical evidence from the LSE's Centre for Economic Performance (CEP) (2016) also finds that EU membership has a significant impact on both EU and non-EU FDI flows.

Link to the Treasury Report here

Related publications
The impact of Brexit on foreign investment in the UK, Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen, CEP Brexit Analysis No.03, April 2016
Life after Brexit : What are the UK's options outside the European Union?, Swati Dhingra and Thomas Sampson, CEP Brexit Analysis No.02, February 2016
The consequences of Brexit for UK trade and living standards, Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen, CEP Brexit Analysis No.01, March 2016

Related links
Swati Dhingra webpage
Hanwei Huang webpage
Gianmarco Ottaviano webpage
Thomas Sampson webpage
John Van Reenen webpage
Growth Programme webpage
Trade Programme webpage

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