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Growth Effects of a Comprehensive Measure of Globalization with Country Specific Time Series Data

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  • Rao, B. Bhaskara
  • Tamazian, Artur
  • Vadlamannati, Krishna Chaitanya

Abstract

Many studies have estimated the growth effects of globalization where globalization was measured with a few economic variables, ignoring its social and political dimensions. Recently Dreher (2006) has developed a comprehensive measure of globalization with several variables from the economic, political and social sectors. He showed, with the panel data methods, that globalization has positive growth effect implying that countries with higher globalization grow faster. We argue that five year average growth rates, used in many panel data studies, are inadequate proxies for the unobservable steady state growth rate (SSGR). Using the Dreher indices we extend the Solow (1956) model to derive country specific estimates of SSGRs for Singapore, Malaysia, Thailand, India and the Philippines. Our results show that countries with higher levels of globalization have higher SSGRs but the growth effects on SSGRs are smaller than in many studies.

Suggested Citation

  • Rao, B. Bhaskara & Tamazian, Artur & Vadlamannati, Krishna Chaitanya, 2008. "Growth Effects of a Comprehensive Measure of Globalization with Country Specific Time Series Data," MPRA Paper 7917, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:7917
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    References listed on IDEAS

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    1. Sebastian Edwards, 2001. "Capital Mobility and Economic Performance: Are Emerging Economies Different?," NBER Working Papers 8076, National Bureau of Economic Research, Inc.
    2. B. Bhaskara Rao & Rup Singh, 2010. "Effects of trade openness on the steady-state growth rates of selected Asian countries with an extended exogenous growth model," Applied Economics, Taylor & Francis Journals, vol. 42(29), pages 3693-3702.
    3. Robert E. Baldwin, 2004. "Openness and Growth: What's the Empirical Relationship?," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 499-521, National Bureau of Economic Research, Inc.
    4. Michael W. Klein, 2003. "Capital Account Openness and the Varieties of Growth Experience," NBER Working Papers 9500, National Bureau of Economic Research, Inc.
    5. Mr. Allan D. Brunner, 2003. "The Long-Run Effects of Tradeon Income and Income Growth," IMF Working Papers 2003/037, International Monetary Fund.
    6. Robert E. Baldwin & L. Alan Winters, 2004. "Challenges to Globalization: Analyzing the Economics," NBER Books, National Bureau of Economic Research, Inc, number bald04-1, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Globalization; Solow Model; Country Specific Steady State Growth Rates;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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