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The Repercussions for International Companies if the UK Leaves the EU - Research Proposal Example

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The paper 'The Repercussions for International Companies if the UK leaves the EU" is a perfect example of a politics research proposal. The fate of the United Kingdom’s (UK’s) membership of the European Union (EU) continues to hang in the balance. As a matter of fact, citizens are just about to go the polls (on 23rd June 2016) to vote in a referendum that will determine whether international companies operating in or outside the UK will have the same opportunity…
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Extract of sample "The Repercussions for International Companies if the UK Leaves the EU"

Table of Contents 1.0.Background information and Rationale for the Research 2 2.0.Aims of the Research 3 3.0.Objectives of the Research 3 4.0.Literature Review 5 5.0.Research Methodology 8 5.1.Research Questions 8 5.2.Methods of Data Collection 9 5.2.1.Questionnaire 10 5.2.2.Interviews 10 5.3.Sample selection process 10 5.4.Data coding/merging 11 5.5.Data analysis 11 6.0.Ethical Consideration 11 7.0.Research Timescale 12 The Repercussions for International Companies if the UK leaves the EU 1.0. Background information and Rationale for the Research The fate of the United Kingdom’s (UK’s) membership of the European Union (EU) continues to hang in the balance. As a matter of fact, citizens are just about to go the polls (on 23rd June 2016) to vote in a referendum that will determine whether international companies operating in or outside UK will have the same opportunity or environment of operations. While others see the June referendum as a key political decisions that UK will have to take, the economic repercussions it will bring to international companies is yet to be established. There is paucity of information regarding what will become of international companies should UK decide to withdraw from the EU specifically; when one considers the ability of international companies’ ability of accessing the European Single Market. Recent discussions regarding a pending Brexit (Brexit is a term referring to the exit of Britain from European Union trade bloc) has got different international companies panic over the loss of jobs, collapse of industries and debt crisis (Coulter and Hancké 2016). Based on this position, the repercussions for international companies should UK finally exit remains sensitive area of study that requires extensive literature review. As the topic remains critical there is need to understand future foreign inward investment for international companies. There is also need to ascertain whether London’s status as world city will still be able to sustain the operations of international companies that were once aligned to or members of EU. Conversely, an understanding has to be made to ascertain whether the exit will allow international companies to have new freedom of negotiating trade deals independently and at the same time kick start a new era of profound economic growth. 2.0. Aims of the Research The aim of this research is to ascertain the repercussions international companies will have should United Kingdom decide to leave European Union. If UK make a decision to exit from the EU there will be different arguments regarding the already existing legal frameworks and issues concerning the operations of international companies. There is an estimation that about 50 percent of current UK laws emanate from EU Treaty provisions or obligations of EU Regulations and Directives (Dushenski 2015). Based on these uncertainties, the aim of the research acts as the broad point about what the research hopes to accomplish and the desired outcome from the process of researching. Currently, international companies are not certain about the extent to which the laws will be repealed to guarantee their operations in UK. Due to these uncertainties, the aim further helps focus on long-term outcomes intended. In addition, the aim of the research introduces what is missing from the literatures reviewed thus identifying the gap in knowledge. According to Gee and Young (2016) Britain forms the largest trading partners with international companies within EU bloc. On average, about 18-25 per cent of the products and services from international companies find their markets in Britain. Furthermore, if the recent traffic at the Channel ports is anything to rely on, then the sheer volume exports and imports by international companies will be affected negatively. 3.0. Objectives of the Research The first objective of the research will be to understand whether the international companies will be streamlined to their operations after the Brexit. Studies such as Pedersen (2015) have argued that even after the exit of Britain, international companies can form strategic dual sourcing partnerships to ensure that business continues as usual. It has to be noted that this research seeks a holistic view of a certain phenomenon (such as labour and employment, business and investment and trade and competition) regarding impending exit of UK from EU. As a result, the first objective has been chosen to allow the research to obtain a complete and rich picture of the impact of impending exit of UK from EU. Finally, the first objective shows that the research proposal will be looking for actionable information and knowledge from qualitative research and it is for this reason that the first objective is general thus helping to link the primary research problems. The second objective of the study is to ascertain whether the international companies will be basing significant inward investment decisions into the United Kingdom upon the premise of free trade access to the wider European market. This objective has been adopted in lieu of the recently ratified Article 50 of the Lisbon Treaty. This research notes from Article 50 of the Lisbon Treaty that there is no clear procedure for members to exit the EU and as a result, there is lack of proper harmonization of laws and framework that can help members to negotiate ‘twin track’ departure arrangements. It will be necessary therefore to conceptualise whether the international companies will still benefit should UK decide to engage in EU Single Market at the same time negotiating trade deals with countries that are already outside the EU. The third objective of the research is to assess the possible repercussions of a Brexit from a macro-direct investment and comprehensive financial regulatory framework as it might affect international companies. Just like Oliver (2014) notes, one of the critical differences that lie at the core of the current contrast to continental Europe (take a case of Germany and Europe) for whom the EU is a security, political, social and economic project as well as an economic one. Noting that some of the most contentious interventions with regard to financial markets have been inspired by UK rather than EU, it is important to understand how the exit of UK will affect the operations of international companies. 4.0. Literature Review Scholars have continued to argue with regard to trade and competition as one of the most critical and central issues which has been posed by the possible exit of the UK from membership of EU. Barrett et al. (2015) noted that trade is imperative to international company’s future prosperity and that with UK outside the EU bloc, there is likelihood that their general income will be affected. While assessing the extent to which international companies will be pegging significant inward investment decisions into the UK upon the premise of free trade access to the wider European market, Oliver (2014) note that the deals international companies will negotiate with UK will be limited. However, the challenge with Barrett et al. (2015) observation is its failure to recognize the fact that sector-based trade sequences are majorly driven by the foreign direct investment (FDI) (we consider FDI to be the investments that are made by an entity or a company based in one country, into an entity or a company based in another country) in as much as UK may be a more important export destination for the said foreign companies. Basing from the argument posited by Oliver (2014) and Barrett et al. (2015), there is clearly gap in knowledge that the two authors are failing to address. That is, it is not clear what sort of deal is going to be negotiated by the UK. In fact, it is not a foregone conclusion that a free trade deal is already awaiting an EU exit. Recent studies that have had interests in the new formation and structures of international companies argue that it will be in the interest of UK and EU to maintain trade in the event of Brexit (Böttcher et al. 2014; Wallace et al. 2015). This way, international companies are unlikely to be affected with regard to their operations. Regardless of the contentious exit UK will decide, this study sees a situation where international companies will have to deal with too much money and too many job losses, both in the UK and EU bloc especially in cases where there is going to be trade barriers imposed post UK exit referendum. Perhaps the most important way to assess the repercussions the exit will bring to the international companies is to assess the trade links between UK and these companies. A substantial literature, starting with Sapir and Wolff (2016) showed that trade tends to benefit both trading partners. The implication of this finding is that a reduction in trade between UK and these companies will have negative impacts on either partner. What holds back the extent to which this research can evaluate the exact repercussions is that the outcome of UK referendum on EU membership and the negotiation between EU and UK is uncertain. Just like Douglas-Scott (2015) noted, this research agrees that a number of possible decisions would impact significantly on the trade flows between these companies and UK and thus on the bilateral trade between UK and these companies. Contextualising this argument, EU keeps a range of tariffs and or quotas form specific non-EU countries or all third countries. This relates to international companies dealing with food, beverage, agricultural products, metals, chemicals, and textiles and electrical among others. Thus, should UK exit the rest of members in the bloc will treat it as third-country import and would therefore automatically be subjected to a certain quota system thus pushing costs of operations for international companies. Studies such as Oliver (2016) have assessed the repercussions of British exit from the perspective of Single Market. While this research agrees that some common technical standards can increase trade between international companies and UK, Oliver (2016) views are correct in the sense that country-specific standards will be the one to affect operations of international companies. One of the directions of the development of the EU Single Market is the development of single standards that can apply throughout the EU. It thus insinuates that Brexit will permit UK to set different standards that may affect imports. Oliver and Möller (2015) found that border trade between a member of trading bloc and one that just exited may escalate by about 2.7 per cent of the value of merchandise trade. What these scholars argue about is that the exit of UK from EU will cause disintegration to international companies thus leading to reductions in trade volumes. An interesting case regards trade patterns among international companies after countries exited from Soviet Union. Coulter et al. (2016) noted that profits from international companies dropped by about 30 percent and the cost of operations shot to 45%. The research attributed the changes to dropped trade intensities between member states. The researcher indicates that the exit of UK from EU will cause disintegration among international companies thus leading to significant reductions in trade. Dushenski (2015) however, has different view regarding the effects international companies will have should UK exit from the bloc. According to his analysis, the exit of UK is just a function of the intensity and nature of the trade between the international companies and the UK. He adds that unless trade relationship between UK and these companies was in terms of aggregate flows, flows at sector-based, product level and across company size groups and company ownership, international companies are unlikely to suffer from such exits. The repercussions for international companies if the UK leaves the EU have also been assessed from the perspective of competition. Gee and Young (2016) argues that the competition policy in UK is unlikely to change radically in the immediate aftermath of UK exit from EU. They add that EU rules of competitions that have been designed to protect the Single Market from anti-competitive behavior, state interference and abusive monopolies have become one of the most attractive features of the EU and are likely to be left even when UK exit. From this perspective, international companies may not be affected with regard to their operations should UK vote to exit the trading bloc. However, there is one aspect that Gee and Young (2016) fails to consider when assessing the rules of competitions. That is, UK may make a decision to follow an entirely detached policy different from that of EU. If this is the case then there would be a loss of legal certainty and the authorities from UK would be needed to handle and increased workload of anti-trust and merger cases as the present larger UK merger cases handled in the EU would now be evaluated in the UK. When this dual system comes to effect, there would be a likelihood of divergence between the merger decisions of the UK and the EU. This would be bad for international companies or business operations that have depended on UK. A recent research by UK Government on the future prospects of international companies and the Balance of Competence between the EU and the UK showed that international companies will indeed suffer should UK fail to retain competence (Pedersen 2015). If Balance of Competence slips through the hands of UK it means they will not be able to create a level playing ground needed for the creation of the Single Market. 5.0. Research Methodology 5.1. Research Questions The following research questions have been identified with an aim of concretizing and solving research problems and or thesis statement: 1. What will be the repercussions for international companies if the UK leaves the EU? 2. Will the international companies base significant inward investment decisions into the United Kingdom upon the premise of free trade access to the wider European market? The research questions challenge assumptions and theories that have been used in the proposal. That is, it tests the validity and conformity of the assumptions and theoretical models that have been adopted for the study. To this regard, such assumption helps this proposal pose a sound research question. In such connection, the questions have been developed as it is able to examine what the proposal considers as the scope, scalability, size and sustainability of the research topic. On the other hand, the questions bring the independent variable which is the causal factor that tends to influence the problem of the research. 5.2. Methods of Data Collection This study opts for mixed data collection methodology employing both qualitative and quantitative research techniques. Mixed methods research is an approach to inquiry that combines or associates both qualitative and quantitative forms. It involves philosophical assumption, the use of qualitative and quantitative approaches, and the mixing of both approaches in a study. Thus, it is more than simply collecting and analysing both kinds of data; it also involves the use of both approaches in tandem so that the overall strength of a study is greater than either qualitative or quantitative research. Since country of study has been identified as UK, a qualitative data collection instrument has been identified as interviews and questionnaires. 5.2.1. Questionnaire The data collection instrument will use a structured questionnaire, which will be issued to respondents engaged in the study. In this case, there will be open-ended questions which will require respondents to formulate their own responses or answers. On the other hand, there will be closed-ended questions requiring respondent to select their answers from the different options provided. 5.2.2. Interviews In this study, a set of questions will be formulated to help facilitate conversation with the respondents. The questions incorporated into these interviews will largely be based on the key objectives of the study. Again, the interview questions will be intended to help the researcher answer the research questions by deciphering the respondents’ perception and awareness on the topic. 5.3. Sample selection process Based on the nature of the research and the targeted respondents, samples will be selected using stratified random sampling process. This method has been preferred ahead of other process such as systematic random sample and simple random sample because the research will be targeting a given strata (unique group, international companies likely to be affected by the exit of UK). Taking hypothetical figure, the total population of region expected to be studied can be denoted as N therefore in order to select a sample of field operators within the N the study will denote the sample as n of N. But since the study is interested in a particular group or strata within N the stratified random samples mean dividing the total population into different samples or strata. 5.4. Data coding/merging The data obtained from the tools aforementioned are going to be entered in a computer program in form of data base, spreadsheet and statistical program. As a result, they will be entered in the same manner for every field operator, state, questionnaire or unit of analysis. The study will therefore have variable names that are assigned to the data which will in turn reflect the nominal definitions of these variables. 5.5. Data analysis Data analysis is a mechanism for reducing and organising data to produce findings that require interpretation by the researcher. The scores of the tests will be processed through SPSS software and used in the quantitative analysis. The qualitative analysis of the responses involved interpreting each aspect of the rubric according to the respondents’ view. Descriptive statistics (means and frequencies) will be utilised in the analysis. Pearson’s Correlation analysis will be employed to decipher the relationship between different variables. Finally, reliability of the instruments will be tested using Cronbach’s Alpha test in order to find out if they achieve a satisfactory level of acceptance. 6.0. Ethical Consideration The identity of all the respondents will be kept anonymous and, in cases where a name will be used in, it will be a pseudonym. Secondly, each participant engaged in this study will do so voluntarily. Consequently, the responses will not be obtained through giving any compensation to the respondents. Before commencing the interview sessions, each respondent will be briefed on what the research involved. In regard to the questionnaires, the purpose of the study will be highlighted in an opening statement. 7.0. Research Timescale Activity/Year April 2016 fill fill fill fill fill Proposal writing Presentation of proposal Correction and amendments Preparation of data collection instruments and collection of data Dissertation Presentation of dissertation report References Barrett, A., Bergin, A., FitzGerald, J., Lambert, D., McCoy, D., Morgenroth, E., Siedschlag, I. and Studnicka, Z., 2015. Scoping the Possible Economic Implications of Brexit on Ireland. Economic and Social Research Institute (ESRI) Research Series. Böttcher, B., Schmithausen, E., Vetter, S., AG, D.B. and Hoffmann, R., 2014. A future in the EU. Reconciling the’Brexit’debate with a more modern EU. Deutsche Bank Research. EU Monitor, European Integration. Frankfurt am Main. Coulter, S. and Hancké, B., 2016. A bonfire of the regulations, or business as usual? The UK labour market and the political economy of Brexit. Political Quarterly. Douglas-Scott, S., 2015. A UK Exit from the EU: The End of the United Kingdom or a New Constitutional Dawn?. Cambridge Journal of International and Comparative Law. Dushenski, L., 2015. CEPLER 2015 national essay competition winning entry: A'brexit'would be a serious threat to London as the centre of globalized legal services. Gee, G. and Young, A.L., 2016. Regaining Sovereignty? Brexit, the UK Parliament and the Common Law. European Public Law, 22(1), pp.131-147. Oliver, T. and Möller, A., 2015. Written evidence to the House of Commons Foreign Affairs Committee’s inquiry into'the costs and benefits of EU membership for the UK's role in the world'. Oliver, T., 2014. The five routes to a Brexit: how the UK might leave the European Union. LSE European Politics and Policy (EUROPP) Blog. Oliver, T., 2016. A European Union without the United Kingdom: the geopolitics of a British exit from the EU. Pedersen, E.H., 2015. F INTERNATIONAL AND NATIONAL ECONOMIES. World Banking Abstracts, 32(4), p.292. Sapir, A. and Wolff, G.B., 2016. One market, two monies: the European Union and the United Kingdom. Bruegel Policy Brief Issue 2016/01 January 2016. Wallace, H., Pollack, M.A. and Young, A.R. eds., 2015. Policy-making in the European Union. Oxford University Press, USA. Appendixes Read More
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