Does globalisation alleviate polarisation?

Abstract

In this study, we investigate the effects of globalisation on polarisation in a panel data set of 149 countries between 2000 and 2017. We consider the Revisited KOF Globalisation indices and two measures of polarisation: polarisation of society and political polarisation. The findings show that globalisation decreases polarisation. We also separate de jure and de facto measures of globalisation and observe significant suppressing effects of the de facto and de jure indices of globalisation on both indicators of polarisation. In addition, we find that economic and political globalisation measures are negatively related to polarisation indicators. The baseline findings are robust to estimate different models and to use different econometric procedures. Finally, we address potential issues with endogeneity, omitted variable bias, outliers and reverse causality.