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This paper studies empirically the role of trade globalization in shifting the electoral base towards populism. We proxy the trade shock with swiftly rising import competition from China and compare voting patterns at the national parliamentary elections from 1992 to 2013 in about 8000 Italian municipalities differently exposed to the trade shock. We instrument import competition from China with Chinese export flows to other high-income countries and estimate the model in first differences. Our results indicate that trade globalization increases support for populist parties, as well as invalid votes and abstentionism. To rationalize these findings, we offer evidence that import competition worsens local labor market conditions ? higher unemployment, lower income and durable consumption ? and increases inequality. Finally, we point out that local public expenditure may play a role in mitigating the political consequences of the trade shock, arguably because it alleviates economic distress.

This paper empirically studies the role of trade globalization in shifting the electoral base towards populism. We proxy trade shock with swiftly rising import competition from China and compare the voting pattern at the parliamentary national elections from 1992 to 2013 in about 8,000 Italian municipalities differently exposed to the trade shock. We instrument import competition with Chinese export flows to other high-income countries and estimate the model in first differences. Our results indicate that trade globalization increases support for populist parties, besides fostering a tendency to cast invalid votes or even abstain from voting. To rationalize these findings, we offer evidence that import competition worsens labor market conditions - higher unemployment, lower income and durable consumption - and increases inequality. Finally, we point out that public expenditure plays a role in mitigating the political consequences of the trade shock, arguably because it alleviates economic distress. ; Dieses Papier untersucht empirisch die Bedeutung der Handelsglobalisierung für die Entwicklung populistischer Tendenzen. Wir betrachten den schnell zunehmenden Importwettbewerb aus China stellvertretend für den Handelsschock und vergleichen das Abstimmungsverhalten bei den Parlamentswahlen von 1992 bis 2013 in rund 8,000 italienischen Gemeinden, die dem Handelsschock unterschiedlich stark ausgesetzt sind. Wir nutzen chinesische Exportströme in andere Länder mit hohen Einkommen als Instrumentvariable für Importe aus China nach Italien und schätzen ein First-Differences-Modell. Unsere Ergebnisse zeigen, dass die Handelsglobalisierung die Zustimmung bei der Wahl populistischer Parteien begünstigt und darüber hinaus die Tendenz fördert, ungültige Stimmen abzugeben oder sich sogar der Stimme zu enthalten. Um diese Ergebnisse zu erklären, liefern wir Belege dafür, dass der Importwettbewerb die Arbeitsbedingungen verschlechtert - höhere Arbeitslosigkeit, geringeres Einkommen und weniger Ausgaben für langlebigen Konsum - und das Einkommensgefälle verschärft. Schließlich weisen wir darauf hin, dass vermehrte öffentliche Ausgaben eine Rolle bei der Milderung der politischen Folgen des Handelsschocks spielen, wohl weil sie die wirtschaftliche Misere der Wähler lindern.

The paper investigates the effect of local electoral rules on the political participation of the residents, as reflected in voter turnout. It focuses on Italy, where municipal voting schemes are differentiated by the size of the city: a single ballot system applies to municipalities with less than 15,000 inhabitants, while a dual ballot system is in place above that threshold. By exploiting this discontinuity, the paper finds that the dual ballot increases political participation. The magnitude of the effect is estimated at between 1 and 3 percentage points.

We study the effects on corporate loan rates of an unexpected change in the Italian legislation which forbade interlocking directorates between banks. Exploiting multiple firm-bank relationships to fully account for all unobserved heterogeneity, we find that prohibiting interlocks decreased the interest rates of previously interlocked banks by 16 basis points relative to other banks. The effect is stronger for high quality firms and for loans extended by interlocked banks with a large joint market share. Interest rates on loans from previously interlocked banks become more dispersed. Finally, firms borrowing more from previously interlocked banks expand investment, employment and sales.

The paper examines the causal impact of bank–firm interlocking directorates on a firm's access to credit. We exploit matched bank–firm panel data containing detailed information on individual loans and on the governing bodies of both the bank and the firm. Identification hinges on the exogenous break up of connections occurring when the supervisory authority places a bank under special administration, resetting its board. For these banks, we compare the dynamics of loans to firms that lost the connection with those of the unconnected firms, chosen through propensity score matching among borrowers from the same banks. We find that the loss of connection is associated with a significant and large drop in the firms' granted loans, and, in particular, in the credit lines that can be unilaterally modified by the lender in the short term. We also show that the advantages of the connection are due mainly to favouritism, rather than to privileged information flows.