Growth Effects of Globalization in the Low Income African Countries: A Systems GMM Panel Data Approach
AbstractThe relationship between globalization and economic growth in the developing countries remains controversial. Liberals argue that globalization will lead to higher economic growth and prosperity. Skeptics contend the opposite, where globalization processes might lead to increased inequality and lower economic growth. Previous studies have examined this issue with single indicators such as trade openness or foreign direct investment (FDI) or aid etc. In this study we make use of a comprehensive measure of globalization developed by Dreher (2006), which measures globalization along three important dimensions viz., economic, political, and social fields to assess the pros and cons of globalization. Our panel data results with a systems based GMM (SGMM) method show a small but significant positive association between globalization and economic growth for a panel of 21 low income African countries for the period 1970 – 2005.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 16595.
Date of creation: 04 Aug 2009
Date of revision:
: Globalization; Economic growth; Solow model; Africa;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
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