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Global Competition and Brexit

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  • Italo Colantone
  • Piero Stanig

Abstract

Using disaggregated referendum returns and individual-level data, we show that support for the Leave option in the referendum regarding European Union membership of the United Kingdom 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. An instrumental variables approach supports a causal interpretation. We claim that this effect is driven by the displacement determined by globalization in the absence of effective compensation of its losers. On the other hand, neither stocks nor inflows of immigrants in a region are associated with support for the Leave option. The analysis of individual data from the British Election Study shows that attitudes towards immigration are strongly correlated with vote choice. Yet, attitudes about immigration are more closely related to the import shock than to the actual incidence of immigration in a region.

Suggested Citation

  • Italo Colantone & Piero Stanig, 2016. "Global Competition and Brexit," BAFFI CAREFIN Working Papers 1644, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
  • Handle: RePEc:baf:cbafwp:cbafwp1644
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    Cited by:

    1. Sascha O Becker & Thiemo Fetzer & Dennis Novy, 2017. "Who voted for Brexit? A comprehensive district-level analysis," Economic Policy, CEPR;CES;MSH, vol. 32(92), pages 601-650.
    2. Riccardo Crescenzi & Marco Di Cataldo & Alessandra Faggian, 2018. "Internationalized at work and localistic at home: The ‘split’ Europeanization behind Brexit," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 117-132, March.
    3. Luigi Guiso & Helios Herrera & Massimo Morelli & Tommaso Sonno, 2017. "Demand and Supply of Populism," EIEF Working Papers Series 1703, Einaudi Institute for Economics and Finance (EIEF), revised Feb 2017.
    4. Thorbecke, Willem, 2017. "Investigating Imbalances in Manufacturing Trade," RIEI Working Papers 2017-07, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    5. repec:oup:erevae:v:44:y:2017:i:4:p:592-633. is not listed on IDEAS
    6. repec:pia:review:v:9:y:2018:i:1:n:1 is not listed on IDEAS
    7. Coricelli, Fabrizio & Ravasan, Farshad R, 2017. "Structural Change and the China Syndrome: Baumol vs Trade Effects," CEPR Discussion Papers 12069, C.E.P.R. Discussion Papers.
    8. Jeffry Frieden, 2018. "The politics of the globalization backlash: Sources and implications," GRU Working Paper Series GRU_2018_001, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    9. Thomas Sampson, 2017. "Brexit: The Economics of International Disintegration," CESifo Working Paper Series 6668, CESifo Group Munich.
    10. Dragomirescu-Gaina, Catalin & Freitas, Maria, 2017. "The social and economic preferences of a tech-savvy generation," MPRA Paper 84232, University Library of Munich, Germany.
    11. Matthieu Crozet & Gianluca Orefice, 2017. "Trade and Labor Market: What Do We Know?," CEPII Policy Brief 2017-15, CEPII research center.
    12. Fabrizio Patriarca & Rama Dasi Mariani & Eugenio Levi, 2017. "Hate at First Sight? Dynamic Aspects of the Electoral Impact of Migrations: The Case of the UK and Brexit," SPRU Working Paper Series 2017-21, SPRU - Science Policy Research Unit, University of Sussex Business School.
    13. Sampson, Thomas, 2017. "Brexit: the economics of international disintegration," LSE Research Online Documents on Economics 86591, London School of Economics and Political Science, LSE Library.
    14. Thomas Sampson, 2017. "Brexit: The Economics of International Disintegration," CEP Discussion Papers dp1499, Centre for Economic Performance, LSE.
    15. Neil Lee & Katy Morris & Thomas Kemeny, 2018. "Immobility and the Brexit vote," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 11(1), pages 143-163.
    16. O’Rourke, Kevin Hjortshøj, 2019. "Economic History and Contemporary Challenges to Globalization," The Journal of Economic History, Cambridge University Press, vol. 79(02), pages 356-382, June.
    17. Anne-Laure Delatte & Sébastien Jean, 2017. "Trade and Macro-Economic Issues for International Co-Ordinational in Tense Times," CEPII Policy Brief 2017-16, CEPII research center.
    18. repec:aea:jecper:v:31:y:2017:i:4:p:163-84 is not listed on IDEAS

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    Keywords

    Brexit; Globalization; Economic Vote;

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