(Bloomberg) -- Britain is significantly less attractive as an international business location because of Brexit but remains well positioned compared with other major economies, according to a German study.
The U.K. slipped behind the U.S. to second place in the latest ranking published by Germany's Foundation for Family Businesses, though it remains ahead of the rest of its Group of Seven partners. Canada was fourth, followed by Germany in 17th, France in 18th, Japan in 20th and Italy in 21st and final spot.
“Brexit has been a major liability for the U.K.,” the authors of the study wrote. “Future British governments have a long road ahead if they wish to regain its economic dynamism, as promised by Brexit advocates.”
The eighth edition of the ranking, which is prepared by the ZEW research institute and was first published in 2006, assessed the business environment in six categories: taxation; labor costs, productivity and human capital; regulation; financing; infrastructure and institutions and energy.
Britain suffered the biggest overall decline of all the countries included, with “Brexit-related uncertainties” having the greatest impact in the area of “financing” and “infrastructure and institutions.”
The U.S. tops the list mainly due to “outstanding performance” in regulation, financing and energy, and it also scores well on labor costs, productivity and human capital. A clear weakness is taxation: “While Trump's tax reform was beneficial, the U.S. still trails most countries in this area,” the authors said.
“Our analysis sheds important light on the extent to which countries will be in a position to ward off the long-term effects of the coronavirus pandemic,” they added.
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