Essays in political economy

Abstract

This thesis consists of three chapters, in which I study the role of globalization and how political views are formed. The first chapter studies the rise of backlash against tourism as a form of antiglobalization sentiment, looking at the role of Airbnb. I construct a spatially disaggregated dataset to study the consequences of Airbnb in London. First, I document that 1 additional Airbnb tourist per 1000 residents increases complaints against tourists by 2.2 per cent. Secondly, I explore the roots of these reactions. I find that higher Airbnb penetration decreases neighbourhood quality, while the housing market is marginally affected. These negative externalities can be explained by a lack of monitoring and coordination by hosts, which are key differences compared to traditional hotel accommodations. Finally, I show that the deterioration of neighbourhood quality markedly reduces social capital, and worsens attitudes towards globalization, with higher support for Brexit. The second chapter documents how firms in tradable sectors are more likely to be subject to external competition to limit market power while non-tradable firms are more dependent on domestic policies and institutions. We combine an antitrust index with firm-level data from Orbis covering more than 12 million firms from 94 countries and find that profit margins of firms operating in non-tradable sectors are significantly lower in countries with stronger antitrust policies. The third chapter studies the impact of the Italian civil war and Nazi occupation of Italy in 1943– 45 on postwar political outcomes. The Communist Party, more active in the resistance movement, gained votes in areas where the Nazi occupation was both longer and harsher, mainly at the expense of centrist parties. This effect persists until the late 1980s. These results suggest that civil war and widespread political violence reshaped political identities in favour of the political groups that emerge as winners.