Economic Integration Increases Support for Globalization: Evidence from India

• In Event: Political Implications of Foreign Direct Investment: Promising Trends & Methods

Abstract

Exposure to Economic Integration Increases Support for Globalization: Evidence from India’s FDI Liberalization

Exposure to globalized production likely produces wide variation in individual attitudes towards global economic integration. Lacking, however, are estimates of exposure’s causal effects on public support for integration. Extant research relies heavily on survey experiments, which cannot assign integration exposure as a treatment. Economic integration is complex, and developing realistic models of individual-level awareness of integration remains a persistent empirical challenge. We evaluate the causal effect of exposure to globalized production on support for economic integration using subnational observational data. We harness India's extensive and unexpected FDI liberalization in 2005, which caused FDI to triple in just one year, as the basis of an instrumental variable research design. Using geo-referenced, detailed survey data spanning over a decade, we analyze change in Indians' support for global economic integration following this shock. We preliminarily find that support for integration increased post-liberalization, and notably, changes in female support for integration largely drives this topline shift. This study uncovers new insights on the dynamics of exposure to globalized production and attitudes toward integration in emerging-market settings.

Authors

• Benjamin Clay Helms, University of Virginia

• Sonal S. Pandya, University of Virginia