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

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  • Xiaodong Xu
  • Hafiz Syed Mohsin Abbas
  • Chunxia Sun
  • Samreen Gillani
  • Atta Ullah
  • Muhammad Ahsan Ali Raza

Abstract

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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  • Xiaodong Xu & Hafiz Syed Mohsin Abbas & Chunxia Sun & Samreen Gillani & Atta Ullah & Muhammad Ahsan Ali Raza, 2021. "Impact of globalization and governance determinants on economic growth: An empirical analysis of Asian economies," Growth and Change, Wiley Blackwell, vol. 52(2), pages 1137-1154, June.
    • Handle: RePEc:bla:growch:v:52:y:2021:i:2:p:1137-1154
    DOI: 10.1111/grow.12475
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    4. Ngo Thai Hung, 2023. "Causal relationship between globalization, economic growth and CO2 emissions in Vietnam using Wavelet analysis," Energy & Environment, , vol. 34(7), pages 2386-2412, November.
    5. Agus Dwi Nugroho & Priya Rani Bhagat & Robert Magda & Zoltan Lakner, 2021. "The impacts of economic globalization on agricultural value added in developing countries," PLOS ONE, Public Library of Science, vol. 16(11), pages 1-23, November.
    6. Ali, Amjad & Ehsan, Rehan & Audi, Marc & Hamadeh, Hani Fayad, 2022. "Does Globalization Promote Financial Integration in South Asian Economies? Unveiling the Role of Monetary and Fiscal Performance in Internationalization," MPRA Paper 115304, University Library of Munich, Germany.
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    8. Muhammad Ahsan Ali Raza & Chen Yan & Hafiz Syed Mohsin Abbas & Atta Ullah, 2021. "Impact of institutional governance and state determinants on foreign direct investment in Asian economies," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2596-2613, December.
    9. Salma Karim & Md. Qamruzzaman & Ishrat Jahan, 2023. "Nexus between Government Debt, Globalization, FDI, Renewable Energy, and Institutional Quality in Bangladesh," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 443-456, May.
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