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CEP/STICERD Applications Seminars

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

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

Monday 06 June 2022 16:00 - 17:30

This event is both online and in person

32L 3.05, 3rd Floor Conference Room, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH

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.

This event will take place in 32L 3.05, 3rd Floor Conference Room, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.

The building is labelled 32L on the map. Enter the building via Lincoln's Inn Fields.

LSE Campus Map

This series is part of the CEP's Labour Markets programme.