This research asks whether moving local production abroad (offshoring) affects electoral outcomes for incumbent government parties. Using a difference-in-differences approach and an original Spanish survey, the author studies municipalities where a local plant relocated production abroad and compares electoral outcomes to municipalities without such events. The paper's central contribution is evidence that voters punish incumbent government parties in places that experienced offshoring, with larger vote declines where more jobs were lost and distinct patterns in coalition governments.
Data and methods
The study combines municipal-level electoral data with events in which local firms moved production abroad and applies a difference-in-differences estimation strategy to compare municipalities before and after offshoring events. The author also reports results across multiple election types (national and regional) and supplements the observational analysis with an original voter survey administered in Spain to probe retrospective evaluations of incumbents.
Main findings
Across time periods, incumbent government parties lose more votes in municipalities that experienced a local plant moving production abroad compared with municipalities that did not. The vote penalty grows with the number of jobs lost to offshoring. In multiparty coalition governments, voters appear to penalize the largest coalition partner more heavily. The survey evidence from Spain supports the claim that offshoring figures into voters' retrospective assessments of incumbent performance.
Difference-in-differences estimation Municipal-level electoral comparison Survey evidence from Spain
- Incumbent parties' vote shares fall in municipalities that experienced offshoring.
- Greater job losses from offshoring are associated with larger incumbent vote declines.
