The Economics of Nationalism

Xiaohuan Lan and Ben Li
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Xiaohuan Lan: Cheung Kong GSB

No 856, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper provides an economic framework for examining how economic openness affects nationalism. Within a country, a region's level of nationalism varies according to its economic interests in its domestic market relative to its foreign market. A region's nationalism is strongest if the optimal size of its domestic market equals the size of its country. All else being equal, increasing a region's foreign trade reduces its economic interests in its domestic market and thus weakens its nationalism. This prediction holds both cross-sectionally and over time, as evidenced by our empirical study using the Chinese Political Compass data and the World Value Surveys. Our framework also applies to analysis of nationalism across countries and receives support from cross-country data.

Keywords: Nationalism; Economic Openness; Country Size; Gains from Trade; China (search for similar items in EconPapers)
JEL-codes: F52 P16 (search for similar items in EconPapers)
Date: 2014-05-04
New Economics Papers: this item is included in nep-cna and nep-int
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Citations: View citations in EconPapers (1)

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Journal Article: The Economics of Nationalism (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:856

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