Loving Globalization: High Growth Enterprises and Public Opinion on International Competition

It is often argued that the adverse effects of exposure to international trade raises anti-globalization attitudes among the lower educated/skilled residents, and this backlash translates into electoral success for populist parties. Though studies identify the positive correlation between regional import-shocks and populist votes, only few investigates the association between international exposure and globalization backlash at the individual level. Moreover, by estimating the globalization effects through import-shocks the extant literature neglects other region-level economic changes that may drive locals’ attitudes in other directions. Instead of investigating the retrospective effects of trade diversion I analyze the prospective effects of structural changes international competition triggers in one’s regional environs in driving globalization attitudes. Building upon the ‘new new trade theory’ (NNTT), I argue that in regions with higher number of rising firms who take advantage of internationalization and export opportunities, individuals will be more supportive of globalization. By contrast, in regions which lack rising-star firms, local population would have little reason to perceive globalization positively. The macro-level effects of business demography would be particularly potent for lower educated/skilled residents who are more sensitive to adverse effects of import competition. I test these theoretical expectations on a pooled dataset of 10 Eurobarometer survey for a period between 2015-2019. The analyses reveal that in regions with higher shares of high growth enterprises (HGEs), individuals are significantly more likely to consider globalization as an opportunity and this positive correlation is particularly pronounced among the lower educated individuals. Moreover, these more vulnerable individuals’ positive evaluation of globalization in high HGE share regions also extend to their assessments of public services. In other words, in regions which hosts rising, high-growth firms lower educated/skilled individuals which are considered as the ‘losers’ of import competition, become less reliant on and more satisfied with the current conditions of public services.