An Empirical Insight into the Financial Globalization–Growth Nexus via Trade Openness: Evidence from Select South Asian Countries

Sahoo, Malayaranjan; Sethi, Narayan

doi:10.1177/0972150919893840

Cited by 37 publications

(23 citation statements)

References 89 publications

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“…Moreover, Sahoo and Sethi (2020) used the panel unit root test, Kao, Fisher and Pedroni's conintegration tests and the panel dynamic ordinary least square to establish a strong positive long-run relationship between foreign aid proxied by financial globablisation and economic growth in selected South Asia economies. These studies only focussed foreign aid linkages with economic growth without emphasis on the mediating role of HCD.…”

Section: Empirical Literaturementioning

confidence: 99%

Human capital interaction on foreign aid-growth nexus: evidence from South Asia and sub-Saharan Africa

Nwani

2021

IJDI

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Purpose The purpose of this study is to examine the interactive role of human capital development (HCD) in foreign aid-growth relations in South Asia and sub-Saharan Africa countries from 1985–2019. Design/methodology/approach The study used panel data that cut across all countries in South Asia and sub-Saharan Africa collected from The World Bank’s Development Indicators. The data were analysed using Bai and Ng panel unit root idiosyncratic cross-sectional tests and the system generalised method of moments (SGMM). Findings The study found that foreign aid and HCD have negative impacts on economic growth. Fortunately, the interaction of human capital with foreign aid reduces the extent to which foreign aid impedes economic growth. The presumption is that South Asia and sub-Saharan Africa economies had not reaped the potential growth effect of foreign aid inflows due to high illiteracy rates and weak social capacities. The peculiarity of these regions hinders the absorptive capacity to transform positive externality associated with foreign aid into sizeable economic prosperity. Practical implications It is imperative for South Asia and sub-Saharan Africa countries to not depend on foreign aid; instead, the strategic action by policymakers should be to developing sustainable social capacities with HCD as the centre-piece. Originality/value The highpoint of this study is its inter-regional approach and the interplay between human capital and foreign aid using the second generation panel unit root estimator and the SGMM approaches.

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Section: Empirical Literaturementioning

confidence: 99%

Human capital interaction on foreign aid-growth nexus: evidence from South Asia and sub-Saharan Africa

Nwani

2021

IJDI

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“…A recent study by Sahoo and Sethi (2020) found that financial globalization and trade openness have a positive and significant influence on economic growth. Similarly a recent study by Rao et al (2020) examined the interrelationship among foreign aid, FDI and economic growth in Southeast Asia and SA during 1980–2016.…”

Section: Review Of Literaturementioning

confidence: 99%

Foreign aid and growth nexus: empirical evidence from South Asian countries

Jena

Sethi

2020

SAJBS

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PurposeThe purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the South Asian region from 1996 to 2017.Design/methodology/approachA sample of eight South Asian countries for the period 1996–2017 is being considered for this study. This study uses various econometrics tools such as Pedroni and Johansen–Fisher panel cointegration test, panel fully modified ordinary least square and panel dynamic ordinary least square (PDOLS) to ascertain the long-run and short-run dynamics among the variables under consideration.FindingsThe empirical results found that long-run, as well as the short-run relationship, exist among foreign aid, economic growth, investment, financial deepening, price stability and trade openness of the South Asian economies. The authors also found unidirectional causality running from foreign aid to economic growth. Both the long-run relationship as well as short-run causality between foreign aid and economic growth is unequivocally positive.Originality/valueThis study uses a dynamic macroeconomic modeling framework to assess the impact of aid flows on economic growth in South Asian economies. Taking into account the diversity of level of growth experienced by the eight countries in the Asian region, this study uses an appropriate regression technique, i.e. PDOLS whose results are robust. Therefore, the policymakers in these countries are well-advised to implement suitable policy measures to ensure optimum utilization of foreign capital resources garnered by way of receipt of foreign aid and build on for stronger future economic growth.

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“…Research by Cook and Kirkpatrick (1997); Firzli and Bazi (2011); De and Iyengar (2014); Khoshnevis Yazdi and Shakouri (2017); Hasan (2019), and Ahmad (2019) has studied the theories of globalization and economic growth and found that globalization promotes economic development. According to globalization theory, people and nations communicate and interact systemically, and this interaction has been increasing day by day (Rephann and Isserman, 1994; Reyes et al., 2018; Robertson, 2003; Sahoo & Sethi, 2020). Based on this interaction, developing countries receive assistance and benefits, promote their cultures and values, and improve their socio‐economic conditions.…”

Section: Introductionmentioning

confidence: 99%

Impact of globalization and governance determinants on economic growth: An empirical analysis of Asian economies

Abbas

Sun

et al. 2021

Growth and Change

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Globalization is an inevitable and irresistible process because many regional integrations emerged in the modern era. A global integration analysis, employing a country’s governance practices, offers various economic benefits and exerts socio‐economic pressures on different economies. This study uses the KOF Globalization Index and Institutional Governance Indicators as explanatory variables and examines their impacts on GDP growth as a dependent variable. The study employed Two‐step System GMM with a sample of 45 Asian economies, with the time horizon from 2003 to 2017. The outcomes show that globalization has positively impacted economic growth, sound regulatory control, and political stability. It further states that practical, feasible, and corruption‐free or transparent economic policies significantly contribute to the economic progression of Asian economies, and help to achieve sustainable development. The study concludes by suggesting that some economic and governance recommendations strengthen struggling Asian economies by addressing the globalization phenomenon tactfully. Future studies can be explored by globalization’s impact on socio‐economic development by taking regional integration as a moderating effect, which controls factors such as governance and institutional quality. Practitioners points The outcomes show that sound regulatory control, political stability, and global integration have positively impacted economic growth. Corruption‐free or transparent economic policies significantly contribute to the economic progression of Asian economies and help to achieve sustainable development. Prudent economic governance practices strengthen struggling Asian economies by approaching the globalization phenomenon prudently.

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An Empirical Insight into the Financial Globalization–Growth Nexus via Trade Openness: Evidence from Select South Asian Countries

Cited by 37 publications

References 89 publications

Human capital interaction on foreign aid-growth nexus: evidence from South Asia and sub-Saharan Africa

Human capital interaction on foreign aid-growth nexus: evidence from South Asia and sub-Saharan Africa

Foreign aid and growth nexus: empirical evidence from South Asian countries

Impact of globalization and governance determinants on economic growth: An empirical analysis of Asian economies

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