Financial globalization, economic growth, and macroeconomic volatility

Rincón-Castro, Hernán

doi:10.32468/be.430

Cited by 2 publications

(2 citation statements)

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“…Estimation of short-run relationship and lagged variables is suppressed from the FMOLS and DOLS results. From the results, we can infer that financial globalization, FDI and trade openness have a positive impact of economic growth in the long run, which supports the empirical findings of Rincón (2007) and Ray (2012). However, labour force does not show any significant effect on economic growth.…”

Section: Empirical Results and Analysissupporting

confidence: 85%

“…According to Parestis and Basu (2003), some industrial and developing countries are benefited out of financial globalization, whereas a number of countries have experienced a collapsed in growth rate and financial crisis over the same period. A similar study by Rincón (2007) and Ray (2012) investigated the long-run relationship between financial globalization and economic growth. They found that financial globalization has a positive impact on economic growth.…”

Section: Review Of Literaturementioning

confidence: 97%

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

Sahoo

Sethi

2020

Global Business Review

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This article explores the relationship among financial globalization, trade openness and economic growth for the select South Asian countries, that is, Bangladesh, Bhutan, India, Pakistan and Sri Lanka over the time period 1990–2017. We have applied panel unit root test like that of Im–Pesaran–Shin (IPS) and Levin–Lin–Chu (LLC) to check the stationarity of the variables. Kao, Fisher and Pedroni’s residual cointegration test has been considered to find out the long-run relationship among the variables. The cointegration results confirm that there exists a long-run relationship among the considered variables. The pairwise Granger Causality test confirms that there is a unidirectional causal relationship between growth and financial globalization, growth and foreign direct investment (FDI) and trade openness and financial globalization. Further, full modified ordinary least square (FMOLS) and dynamic ordinary least squares (DOLS) methods are used to find out the long-run dynamic relation between the variables, and the results show that financial globalization and trade openness have a positive and significant influence on economic growth. Our empirical findings suggest that South Asian countries should ensure that necessary policies require to be implemented if they need to partake in the gains from trade openness and capital flows, which would lead to stimulate the economic performance of the country. Also, governments should focus more on the enhancement of domestic financial system. In addition, an open economy requires global coordination to build a strong international financial system to prevent and manage financial crises or potential shock.

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Section: Empirical Results and Analysissupporting

confidence: 85%

Section: Review Of Literaturementioning

confidence: 97%