This paper sheds light on the main aggregate-level determinants of electoral support for regionalist parties across 10 Western European countries. A region being relatively richer than the country to which it belongs is associated with higher electoral support for regionalist parties only to the extent that the region is culturally differentiated. This hypothesis is substantiated theoretically, tested empirically and found to hold in the form of a strong and significant interaction effect between cultural and economic variables. This result, omitted in previous studies, implies a profound change in the interpretation of the role of income and cultural differences in explaining support for regionalism, for both autonomist and separatist parties.

We use rank correlations as distance functions to establish the interconnectivity between stock returns, building weighted signed networks for the stocks of seven European countries, the US and Japan. We establish the theoretical relationship between the level of balance in a network and stock predictability, studying its evolution from 2005 to the third quarter of 2020. We find a clear balance–unbalance transition for six of the nine countries, following the August 2011 Black Monday in the US, when the Economic Policy Uncertainty index for this country reached its highest monthly level before the COVID-19 crisis. This sudden loss of balance is mainly caused by a reorganization of the market networks triggered by a group of low capitalization stocks belonging to the non-financial sector. After the transition, the stocks of companies in these groups become all negatively correlated between them and with most of the rest of the stocks in the market. The implied change in the network topology is directly related to a decrease in stock predictability, a finding with novel important implications for asset allocation and portfolio hedging strategies.

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