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Global Competition and Brexit

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  • COLANTONE, ITALO
  • STANIG, PIERO

Abstract

We show that support for the Leave option in the Brexit referendum was systematically higher in regions hit harder by economic globalization. We focus on the shock of surging imports from China over the past three decades as a structural driver of divergence in economic performance across U.K. regions. An IV approach supports a causal interpretation of our finding. We claim that the effect is driven by the displacement determined by globalization in the absence of effective compensation of its losers. Neither overall stocks nor inflows of immigrants in a region are associated with higher support for the Leave option. A positive association only emerges when focusing on immigrants from EU accession countries. The analysis of individual data suggests that voters respond to the import shock in a sociotropic way, as individuals tend to react to the general economic situation of their region, regardless of their specific condition.

Suggested Citation

  • Colantone, Italo & Stanig, Piero, 2018. "Global Competition and Brexit," American Political Science Review, Cambridge University Press, vol. 112(2), pages 201-218, May.
  • Handle: RePEc:cup:apsrev:v:112:y:2018:i:02:p:201-218_00
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    Cited by:

    1. Nicholas Crafts, 2019. "The Fall in Potential Output due to the Financial Crisis: A Much Bigger Estimate for the UK," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(4), pages 625-635, December.
    2. Alabrese, Eleonora & Becker, Sascha O. & Fetzer, Thiemo & Novy, Dennis, 2019. "Who voted for Brexit? Individual and regional data combined," European Journal of Political Economy, Elsevier, vol. 56(C), pages 132-150.
    3. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    4. Eugenio Levi & Rama Dasi Mariani & Fabrizio Patriarca, 2020. "Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 1-32, January.
    5. Eleonora Alabrese & Sascha Becker & Thiemo Fetzer & Dennis Novy & Sascha O. Becker, 2018. "Who Voted for Brexit? Individual and Regional Data Combined," CESifo Working Paper Series 7193, CESifo Group Munich.
    6. Alessia Damonte & Fedra Negri, 2019. "Gauging fiscal worlds: how the EU countries balanced equality and wealth between 2007 and 2016," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1675-1692, July.
    7. Dijkstra, Lewis & Poelman, Hugo & Rodríguez-Pose, Andrés, 2019. "The geography of EU discontent," CEPR Discussion Papers 14040, C.E.P.R. Discussion Papers.
    8. Carlo Altomonte & Gloria Gennaro & Francesco Passarelli, 2019. "Collective Emotions and Protest Vote," CESifo Working Paper Series 7463, CESifo Group Munich.
    9. Mihaela Simionescu & Dalia Streimikiene & Wadim Strielkowski, 2020. "What Does Google Trends Tell Us about the Impact of Brexit on the Unemployment Rate in the UK?," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-10, January.
    10. Raffaele Giammetti, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," Mo.Fi.R. Working Papers 152, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    11. Becca B. R. Jablonski & Michael Carolan & James Hale & Dawn Thilmany McFadden & Erin Love & Libby Christensen & Tabitha Covey & Laura Bellows & Rebecca Cleary & Olaf David & Kevin E. Jablonski & Andre, 2019. "Connecting Urban Food Plans to the Countryside: Leveraging Denver’s Food Vision to Explore Meaningful Rural–Urban Linkages," Sustainability, MDPI, Open Access Journal, vol. 11(7), pages 1-18, April.
    12. Bove, Vincenzo & Efthyvoulou, Georgios & Pickard, Harry, 2019. "Did terrorism affect the Brexit vote?," CAGE Online Working Paper Series 415, Competitive Advantage in the Global Economy (CAGE).
    13. Carlo Altomonte & Gloria Gennaro & Francesco Passarelli, 2019. "Collective Emotions And Protest Vote," BAFFI CAREFIN Working Papers 19107, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    14. repec:cpr:ceprdp:14111 is not listed on IDEAS
    15. Mauro Caselli & Andrea Fracasso & Silvio Traverso, 2019. "Globalization, robotization and electoral outcomes: Evidence from spatial regressions for Italy," DEM Working Papers 2019/5, Department of Economics and Management.
    16. Steven J. Bosworth & Dennis J. Snower, 2019. "The Interplay of Economic, Social and Political Fragmentation," CESifo Working Paper Series 7935, CESifo Group Munich.
    17. Mohammad Farhad & Michael Jetter, 2019. "On the Relationship between Trade Openness and Government Size," CESifo Working Paper Series 7832, CESifo Group Munich.
    18. Giammetti, Raffaele, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," MPRA Paper 92835, University Library of Munich, Germany.

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