Trading Nationalism: A Comprehensive Regional Analysis of Globalization and Euroscepticism

Abstract

A wave of anti-European sentiment in Western Europe has risen over the past two decades, evidenced by the 2016 Brexit referendum and the relative success of na- tionalist and populist parties across France, Italy, and Germany in recent elections. Employing a 2SLS difference-in-differences model, this thesis evaluates the impact of changing import competition from China and Eastern Europe on euroscepticism in France, Germany, and Italy at the NUTS 2 regional level from 2001 to 2017/2018. To do so, I define an exposure variable that measures regional susceptibility to rising trade growth and include a robust set of economic, demographic, and political con- trols over two time periods. In line with empirical analyses on the political costs of rising trade competition, I conclusively find a positive relationship in France and Italy between relative exposure to import competition and eurosceptic ideological demand over the past two periods. In Germany, I fail to find a significant relationship from 2011 to 2017, highlighting the potential for other explanations of anti-European po- litical realignment. Attempting to explain the rise of eurosceptic sentiment in the 21st century, the findings of this thesis help us expand our understanding of the costs of trade, and they suggest that in some economies, the European Union’s greatest hope for preventing another departure and promoting integration is to focus on supporting those most affected by globalization.