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Government size, government debt and globalization

Author

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  • Dong-Hyeon Kim
  • Yu-Bo Suen
  • Shu-Chin Lin
  • Joyce Hsieh

Abstract

This article empirically investigates the effect of globalization on government size and debt. Using panel heterogeneous cointegration techniques to a panel of developing and developed countries, it finds that globalization reduces government size and debt. In terms of components of globalization, government size is found to increase with trade openness but decreases with financial, social and political globalization. On the other hand, government debt increases with financial and trade openness but decreases with social and political globalization. The evidence is robust to different estimation methods and different samples. Our data also indicate unidirectional causality running from globalization measures to government size and debt.

Suggested Citation

  • Dong-Hyeon Kim & Yu-Bo Suen & Shu-Chin Lin & Joyce Hsieh, 2018. "Government size, government debt and globalization," Applied Economics, Taylor & Francis Journals, vol. 50(25), pages 2792-2803, May.
  • Handle: RePEc:taf:applec:v:50:y:2018:i:25:p:2792-2803
    DOI: 10.1080/00036846.2017.1409418
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    References listed on IDEAS

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