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Article
Publication date: 8 January 2019

Nigel Culkin and Richard Simmons

Much has been written about trade deal opportunities after Brexit (e.g. Minford et al., 2017; Singham and Tylecote, 2018) but much less about envisaged “supply side…

Abstract

Purpose

Much has been written about trade deal opportunities after Brexit (e.g. Minford et al., 2017; Singham and Tylecote, 2018) but much less about envisaged “supply side mechanisms” that would translate a Brexit shock into improved UK competitive performance. Indications as to the supply side mechanisms involved can be found in some pro-Brexit writings and speeches and revolve around cutting regulation and reducing taxation, to spur innovation entrepreneurship. The authors contend that these measures align to a broad set of policy measures associated with Economic Shock Therapy, the Laffer Curve and the associated “Washington Consensus” (Williamson, 2005). The authors are looking to stimulate a conversation around whether these measures are most likely to stimulate entrepreneurial innovation and growth. The authors open by contrasting these concepts to growth equilibrium dynamics drawn from Wicksell, Keynes and Schumpeter – and by implication dynamic Walrasian General Equilibrium – to pose the question, is entrepreneur-led growth best led via slashing regulations and taxes or by focussing on correcting existing market failures? The purpose of this paper is to promote controversy and debate as to which “supply side measures” are most effective in enabling entrepreneurial growth.

Design/methodology/approach

The authors briefly review the pro-Brexiteer economic framework and relate this to broader Economic Shock Therapy and Laffer Curve concepts; how these have been applied and how some argue they can become “supply side” enablers in a positive Brexit innovation and entrepreneurship transformation. By drawing upon fundamental economic relationships such as Wicksell’s (1898) “Natural Rate of Interest”, the authors highlight the importance of information asymmetry and regulatory distortion in financial markets, resulting in some entrepreneurs (and associated innovations) failing to receive the capital their project merit. The authors pose the question, whether Shock Therapy, Laffer Curve type tax cuts and any Brexit “bonfire of regulation” will raise entrepreneurial growth and success.

Findings

Both Shock Therapy and Laffer Curve inspired tax cuts have a patchy record of success, despite notable achievements in post-1991 Poland. The authors stress entrepreneurs drive innovation and growth, and a key support to them requires correcting “access to finance” market failures. It is questionable if Economic Shocks contribute anything to resolving this fundamental problem.

Originality/value

The authors open the supply side debate on anticipated “Brexit Transformation” in the context of long standing (some maybe long forgotten) theoretical understandings, thereby posing the question as to whether potential Brexit-related deregulation, tax cuts and “Economic Shock” therapy are likely to raise entrepreneurial competitive advantage and success rates. Market failure in financial market support for small firm growth and innovation needs are highlighted. Arguably, economic growth and innovation would be better sustained by addressing these failures, than introducing the “unknowns” and risks associated with a substantial Economic Shock.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 25 no. 2
Type: Research Article
ISSN: 1355-2554

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Article
Publication date: 1 September 2000

Nigel Culkin and David Smith

Argues that the way in which the UK Government, through its various departments and quangos, approaches designed to approve the effectiveness of the small business sector…

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Abstract

Argues that the way in which the UK Government, through its various departments and quangos, approaches designed to approve the effectiveness of the small business sector, is based on a flawed understanding of how small businesses actually operate. Argues that this naïve, over‐simplistic understanding of the motivation of those in the small business sector means that many government interventions that are made, are blunt instruments destined to fail, given the limited understanding shown of the complexity of the small business market. Presents evidence from two recent studies amongst small firms; a series of large‐scale qualitative studies undertaken for a blue chip company and a mixed study on the Business Link network. The emphasis is based on – using qualitative research – getting to grips with the emotion, ambiguity and complexity that characterises this market.

Details

Qualitative Market Research: An International Journal, vol. 3 no. 3
Type: Research Article
ISSN: 1352-2752

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Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

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Book part
Publication date: 8 May 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Mastering Brexits Through The Ages
Type: Book
ISBN: 978-1-78743-897-2

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Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

To view the access options for this content please click here
Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

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Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

To view the access options for this content please click here
Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

To view the access options for this content please click here
Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

To view the access options for this content please click here
Book part
Publication date: 6 December 2018

Nigel Culkin and Richard Simmons

Abstract

Details

Tales of Brexits Past and Present
Type: Book
ISBN: 978-1-78769-438-5

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