Globalization and economic growth: empirical evidence on the role of complementarities

PLoS One. 2014 Apr 10;9(4):e87824. doi: 10.1371/journal.pone.0087824. eCollection 2014.

Abstract

This study was carried out to investigate the effect of economic globalization on economic growth in OIC countries. Furthermore, the study examined the effect of complementary policies on the growth effect of globalization. It also investigated whether the growth effect of globalization depends on the income level of countries. Utilizing the generalized method of moments (GMM) estimator within the framework of a dynamic panel data approach, we provide evidence which suggests that economic globalization has statistically significant impact on economic growth in OIC countries. The results indicate that this positive effect is increased in the countries with better-educated workers and well-developed financial systems. Our finding shows that the effect of economic globalization also depends on the country's level of income. High and middle-income countries benefit from globalization whereas low-income countries do not gain from it. In fact, the countries should receive the appropriate income level to be benefited from globalization. Economic globalization not only directly promotes growth but also indirectly does so via complementary reforms.

Publication types

  • Research Support, Non-U.S. Gov't
  • Review

MeSH terms

  • Developing Countries / economics
  • Economic Development*
  • Humans
  • Income
  • International Cooperation
  • Internationality*
  • Models, Economic
  • Poverty / economics
  • Public Policy
  • Social Class
  • Socioeconomic Factors

Grants and funding

The study is supported by the Ministry of Higher Education of Malaysia, Malaysian International Scholarship (MIS). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.