Global Competition and Brexit

47 Pages Posted: 16 Nov 2016  

Italo Colantone

Bocconi University

Piero Stanig

Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics

Date Written: September 28, 2016

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.

Keywords: Brexit; Globalization; Economic Vote

Suggested Citation

Colantone, Italo and Stanig, Piero, Global Competition and Brexit (September 28, 2016). BAFFI CAREFIN Centre Research Paper No. 2016-44. Available at SSRN: https://ssrn.com/abstract=2870313 or http://dx.doi.org/10.2139/ssrn.2870313

Italo Colantone (Contact Author)

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Piero Stanig

Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics ( email )

Via Roentgen 1
Milan, 20136
Italy

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