Relationship between Globalization and Growth in Developing Economies: A Robust Panel Data Analysis

Abstract

The study aims to examine the relationship between globalization and economic growth across a panel of developing economies. The steps toward globalization have been multifaceted and complex, involving a range of economic, political, and technological factors. The study used the panel dataset of 68 developing economies from 2000 to 2024 and applied the different regression techniques to assess the relationship between globalization and economic growth. The results presented a positive relationship between dynamic term of economic globalization on economic growth, and negative association between financial globalization and economic growth. Based on the findings, the study suggested that governments should continue to prioritize policies that promote economic globalization e.g., free trade agreements and foreign direct investment. However, the negative impact of financial globalization on growth cannot be ignored. The authorities have to mitigate the risks associated with financial globalization, such as excessive volatility in financial markets and exposure to external shocks.