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CEP/STICERD Applications Seminars

Voting on a Trade Agreement: Firm Networks and Attitudes Toward Openness

Diana Van Patten (Yale University), joint with Esteban Mendez-Chacon

Monday 06 June 2022 16:00 - 17:30

Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, in-person seminars are open to the public.

Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.

About this event

We exploit a natural experiment to study the extent to which popular attitudes toward trade are driven by economic fundamentals. In 2007, Costa Rica put a free trade agreement (FTA) to a national referendum. With a single question on the ballot, 59% of Costa Rican adult citizens cast a vote on whether they wanted an FTA with the United States to be ratified, or not. We merge disaggregated referendum results with employer-employee data, customs and balance-sheet data, firm-to-firm transactions data, and data on household composition and expenditures. We document that a firm’s exposure to the FTA, directly and via input-output linkages, significantly influences the voting behavior of its employees. This effect is greater for voters who are aligned with pro-FTA political candidates. We find that import competition plays a role in explaining votes against openness, and that within-industry heterogeneity is key in explaining votes, as compared with sector-level exposure. We also show that citizens considered the expected decrease in consumer prices when exercising their vote.

Applications (Applied Micro) Seminars are held on Mondays in term time at 12:00-13:30 in SAL 3.05 in person.

Seminar organiser: Maitreesh Ghatak

For further information please contact Sadia Ali:

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