Globalization and Economic Growth: A Case Study in A Few Developing Countries (1981-2022)
Aashna Ased
Integrated MSc Economics Program, BITS Pilani, India.
Aastha Sinha *
Integrated MSc Economics Program, BITS Pilani, India.
Harshvardhan Jain
Integrated MSc Economics Program, BITS Pilani, India.
Prakhar Mittal
Integrated MSc Economics Program, BITS Pilani, India.
*Author to whom correspondence should be addressed.
Abstract
Globalization has become an integral part of the contemporary economic landscape, shaping the destinies of nations, and influencing their socio-economic development. This research paper investigates the economic effects of globalization on developing countries to find a possible correlation between global interconnectedness and growth.
The research aims to uncover an approximate quantitative impact of globalization on the economic performance of developing countries. By utilizing empirical data from a diverse set of nations, the study seeks to identify patterns, trends, and correlations that provide insights into the dynamics of globalization.
The research accomplishes this by employing a log-linear regression model that has been used in existing literature for some isolated cases. The study focuses on three key economic indicators: Real Gross Domestic Product (RGDP), Foreign Direct Investment (FDI), and Trade Openness (TRO).
The methodology involves constructing a log-linear regression model to analyze the intricate relationships between RGDP, FDI, and Trade Openness. 8 countries from various parts of the world were selected for the study and data was collected for RGDP, FDI and TRO for each of them on which regression analysis was performed. Data was collected from the year 1981 to 2022, providing more than the required number of observations to perform time series analysis.
The findings of this study reveal a high positive correlation between the proxies of globalization and growth. This paper is expected to contribute to the ongoing discourse on the role of globalization in shaping the economic trajectories of developing countries as it is the first to extend the application of an existing model to a wider and more generalized set of countries.
Keywords: Globalization, developing countries, growth, foreign direct investment, gross domestic product, trade openness, economic impact, regression analysis, log-normal model
How to Cite
Downloads
References
Titalessy PB. The impact of globalization on economic growth in Asia-Pacific. Asia Pacific Journal of Advanced Business and Social Studies. 2018;4(2):79-85.
Halmai P. Globalisation versus deglobalisation. Financial and Economic Review. 2023;22(2):5-24.
Aderemi TA, Ogunleye AG, Lucas BO, Okoh JI. Globalization and economic growth: Evidence from European countries. European Financial and Accounting Journal. 2020;15(1):67-82.
Steiner A. The globalization process and the Eastern bloc countries in the 1970s and 1980s. European Review of History: Revue européenne d'histoire. 2014;21 (2):165-181
Siddiqui K. Globalisation and developing countries: Opportunities or marginalization. Globalisation at the Cross Roads. 2008;46-71.
Moghaddam AA. Globalization and economic growth: A case study in a few developing countries (1980-2010). Research in World Economy. 2012; 3(1):54.
Samimi P, Jenatabadi HS. Globalization and economic growth: Empirical evidence on the role of complementarities. PloS one. 2014;9(4):e87824
Din AM. Informatic models used in economic analysis of correlation between GDP and FDI. Polish Journal of Management Studies; 2015.
Yadav P. Impact of globalization on India lap lambert academic Publ; 2012.
Velasco A. Liberalization, crisis, intervention: The Chilean Financial System. 1988;1975-1985.
Vial J. Globalisation and the Chilean economy. BIS Paper, (100e); 2018.
Onder N. The Turkish project of globalization and new regionalism. Alternatives: Turkish journal of international relations. 2008;7(2&3):86-110.
Hung NT. Effect of economic indicators, biomass energy on human development in China. Energy & Environment. 2022;33(5): 829-852.
de Bell LA. Globalization, regional development and local response: The impact of economic restructuring in coahuila, Mexico. Rozenberg Publishers; 2005.
Githanga B. Trade liberalization and economic growth in Kenya: An Empirical Investigation. 2015;1975-2013.
Easterly W. The lost decades: Developing countries' stagnation in spite of policy reform 1980–1998. Journal of Economic growth. 2001;6(2): 135-157.
Zeb N, Qiang F, Sharif MS. Foreign direct investment and unemployment reduction in Pakistan. International Journal of Economics and Research. 2014;5(2): 10-17.