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The Economics of Nationalism

Author

Listed:
  • Xiaohuan Lan
  • Ben G. Li

Abstract

This paper provides an economic framework for examining how economic openness affects nationalism. Within a country, a region's level of nationalism varies according to its economic interests in its domestic market relative to its foreign market. All else being equal, increasing a region's foreign trade reduces its economic interests in its domestic market and thus weakens its nationalism. This prediction holds both cross-sectionally and over time, as evidenced by our empirical study using the Chinese Political Compass data and the World Value Surveys. Our framework also applies to analysis of nationalism across countries and receives support from cross-country data. (JEL F14, F52, O17, O19, P26, P33)

Suggested Citation

  • Xiaohuan Lan & Ben G. Li, 2015. "The Economics of Nationalism," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 294-325, May.
    • Handle: RePEc:aea:aejpol:v:7:y:2015:i:2:p:294-325
    Note: DOI: 10.1257/pol.20130020
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    Cited by:

    1. Lihua Dai & Qi Fan & Yanyun Li & Faqin Lin, 2021. "No time to look after the kids: The unintended consequences of export expansion on child health," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(3), pages 527-548, July.
    2. Yifei Liu & Yuang Panwang & Chao Gu, 2025. "“Turning right”? An experimental study on the political value shift in large language models," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-10, December.
    3. Kaiser, Tim & Menkhoff, Lukas, 2020. "Financial education in schools: A meta-analysis of experimental studies," Economics of Education Review, Elsevier, vol. 78(C).
    4. Strulik, Holger, 2021. "From pain patient to junkie: An economic theory of painkiller consumption and its impact on wellbeing and longevity," Journal of Health Economics, Elsevier, vol. 76(C).
    5. Ani Harutyunyan, 2020. "National Identity and Public Goods Provision," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(1), pages 1-33, March.
    6. Yang, Jidong & Huang, Bin & Yang, Qijing & Zhou, Yulong, 2022. "Impact of the US–China trade war on resource allocation: Evidence from China's land supply," China Economic Review, Elsevier, vol. 76(C).
    7. Kazakis, Pantelis, 2024. "Rhetorical Nationalism and Corporate Tax Avoidance: Insights from China," MPRA Paper 121633, University Library of Munich, Germany.
    8. Shuai Chen & Faqin Lin & Xi Yao & Peng Zhang, 2020. "WTO accession, trade expansion, and air pollution: Evidence from China’s county‐level panel data," Review of International Economics, Wiley Blackwell, vol. 28(4), pages 1020-1045, September.
    9. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    10. Qin, Yu & Ruan, Jianqing & Wang, Ling & Yan, Jubo, 2022. "Genetic distance and intra-national variation in preferences and behaviours," Journal of Asian Economics, Elsevier, vol. 83(C).
    11. Piegeler, Monika & Röhl, Klaus-Heiner, 2015. "Gründungsförderung in Deutschland: Ein Aktionsplan gegen sinkende Gründerzahlen," IW policy papers 17/2015, Institut der deutschen Wirtschaft (IW) / German Economic Institute.
    12. Wu, Sihong & Fan, Di & Su, Yiyi, 2025. "International relations and foreign divestment of multinational enterprises," International Business Review, Elsevier, vol. 34(5).
    13. Naz, Lubna & Patel, Kamalesh Kumar, 2020. "Decomposing socioeconomic gap in chronic malnutrition among preschool children in Pakistan," Children and Youth Services Review, Elsevier, vol. 119(C).
    14. Thomas Gawarkiewicz & Yao Tang, 2017. "The Relationship between Political Tensions, Trade and Capital Flows in ASEAN Plus Three," The World Economy, Wiley Blackwell, vol. 40(9), pages 1958-1988, September.
    15. Noruzoliaee, Mohamadhossein & Zou, Bo & Zhou, Yan (Joann), 2021. "Truck platooning in the U.S. national road network: A system-level modeling approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    16. Smyth, Mary-Ann, 2023. "Plantation forestry: Carbon and climate impacts," Land Use Policy, Elsevier, vol. 130(C).
    17. Hadjiyiannis, Costas & İriş, Doruk & Tabakis, Chrysostomos & Ten, Gi Khan, 2025. "Are nationalist countries more protectionist?," World Development, Elsevier, vol. 196(C).
    18. Fred van Raaij, W. & Riitsalu, Leonore & Põder, Kaire, 2023. "Direct and indirect effects of self-control and future time perspective on financial well-being," Journal of Economic Psychology, Elsevier, vol. 99(C).
    19. Zhang, Penglong, 2020. "Home-biased gravity: The role of migrant tastes in international trade," World Development, Elsevier, vol. 129(C).
    20. Pan, Wei-Fong, 2023. "The effect of populism on high-skilled migration: Evidence from inventors," European Journal of Political Economy, Elsevier, vol. 79(C).

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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