2020, Volume 73 - Issue 2
RSS feed citation: at RePEc
Publication date: 06 May 2020
THE PERSISTING US TRADE DEFICIT. IS PROTECTIONISM THE RIGHT ANSWER?Read the article
TRADE RELATION BETWEEN INDIA AND OTHER BRICS COUNTRIES: A MULTIDIMENSIONAL APPROACH USING GRAVITY MODEL AND GRANGER CAUSALITYRead the article
STRATEGIC TRADE POLICY WITH ASYMMETRIC BARGAINING AGENDARead the article
TRADE LINKAGES AND BUSINESS CYCLE CO-MOVEMENT: ANALYSIS OF TRADE BETWEEN AFRICAN ECONOMIES AND THEIR MAIN TRADE PARTNERSRead the article
Cândida FERREIRA, Lisbon School of Economics and Management, Universidade de Lisboa and UECE – Research Unit in Complexity and Economics, Lisboa, Portugal
Using different kinds of panel unit root and cointegration tests as well as panel estimations this paper seeks to improve upon the existing literature by analysing the relationship between globalisation and economic growth in 87 countries across all continents over the period 1970–2016. The results obtained confirm the existence of long-run relationships between the real GDP per capita and all the indices included in the new version of the KOF globalisation index as well as that globalisation is clearly relevant to economic growth. Moreover, there is evidence that this is a very complex relationship, being hard to conclude that globalisation always benefits economic growth. In addition, the comparison of the results obtained for the whole sample including 87 countries and those obtained for the sub-sample of the 16 European countries do not provide clear demonstration that the geographic proximity or the recent process of European integration are very relevant in terms of the contribution of globalisation to economic growth.
C22, E10, F41, F62
Economic Growth, Globalisation, KOF Globalisation Index, Cointegration, Panel Estimations
Agenor, P.R. (2002), “Does Globalization Hurt the Poor?”, World Bank Policy Research Working Paper No. 2922, available at
Ali, A. and K.S. Imai (2013), “Crisis, Economic Integration and Growth Collapses in African Countries”, The School of Economics Discussion Paper Series 1302, Economics, The University of Manchester.
Amavilah, V.H. (2009), “National Symbols, Globalization, and the Well-Being of Nations”, MPRA Paper No. 14882, available at
Arellano, M. and S. Bond (1991), “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations”, Review of Economic Studies, 58(2), 277-297.
Arellano, M. and O. Bover (1995), “Another Look at the Instrumental-Variable Estimation of Error-Components Model”, Journal of Econometrics, 68(1), 29-52.
Baltagi, B. (2008), Econometric Analysis of Panel Data (Fourth Edition; First Edition in 2001), John Wiley & Sons: Chichester.
Bergh, A. and T. Nilsson (2010), “Do Liberalization and Globalization Increase Income Inequality?”, European Journal of Political Economy, 26(4), 488-505.
Blundell, R. and S. Bond (1998), “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models”, Journal of Econometrics, 87(1), 115-143.
Bond, S. (2002), “Dynamic Panel Data Models: A Guide to Micro Data Methods and Practice”, Institute for Fiscal Studies, London, Working Paper CWP09/02.
Breitung J. and M.H. Pesaran (2008), Unit Roots and Cointegration in Panels, in: L. Mátyás, P. Sevestre (Eds), “The Econometrics of Panel Data”, Vol 46. Springer: Berlin, Heidelberg.
Cameron, R. (1993), A Concise Economic History of the World: From Palaeolithic Times to the Present, Oxford University Press.
Chang, C-P. and C-C. Lee (2010), “Globalization and Economic Growth: A Political Economy Analysis for OECD Countries”, Global Economic Review, 39(2), 151-173.
Chang, C-P., C-C. Lee and M-C. Hsieh (2011), “Globalization, Real Output and Multiple Structural Breaks”, Global Economic Review, 40(4), 421-444.
Chang, C-P., C-C. Lee and M-C. Hsieh (2015), “Does Globalization Promote Real Output? Evidence from Quantile Cointegration Regression”, Economic Modelling, 44, 25-36.
Dollar, D. and A. Kraay (2004), “Trade, Growth and Poverty”, Economic Journal, 114(493), 22-49.
Dreher, A. (2006), “Does Globalization Affect Growth? Evidence from a New Index of Globalization”, Applied Economics, 38(10), 1091–1110.
Dreher, A., N. Gaston and P. Martens (2008), Measuring Globalisation: Gauging its Consequences, Springer: New York.
Engle, R.F. and C.W.J. Granger (1987), “Cointegration and Error Correction: Representation, Estimation and Testing”, Econometrica, 55(2), 251-276.
Eppinger, P. and N. Potrafke (2015), Did Globalisation Influence Credit Market Deregulation? CESifo Working Paper No. 5374, available at
Ezcurra, R. and A. Rodríguez-Pose (2013), “Does Economic Globalization Affect Regional Inequality? A Cross-Country Analysis”, World Development, 52, 92-103.
Fischer, S. (2003), “Globalization and its Challenges”, The American Economic Review, 93(2), 1-30.
Frankel, J.A. and D.H. Romer (1999), “Does Trade Cause Growth?” The American Economic Review, 89(3), 379-399.
Frankel, J.A. and A.K. Rose (2005), “Is Trade Good or Bad for the Environment? Sorting out the Causality”, Review of Economics and Statistics, 87(1), 85-91.
Gurkul, H. and L. Lach (2014), “Globalization and Economic Growth: Evidence from Two Decades of Transition in CEE”, Economic Modelling, 36, 99-107.
Gygli, S., F.Haelg, N. Potrafke and J.E. Sturm (2019), “The KOF Globalisation Index – Revisited”, The Review of International Organizations, 14(3), 543-574.
Hadri, K. (2000), “Testing for Stationarity in Heterogenous Panel Data”, The Econometrics Journal, 3(2), 148-161.
IMF(2000), Globalization: Threat or Opportunity? An IMF Issues Brief, available at
Kao, C. (1999), “Spurious Regression and Residual-Based Tests for Cointegration in Panel Data”, Journal of Econometrics, 90(1), 1-44.
Kazar, A. and G. Kazar (2016), “Globalization, Financial Development and Economic Growth”, International Journal of Economics and Financial Issues, 6(2), 578-587.
Levin, A., C-F. Lin and C-S. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties”, Journal of Econometrics, 108(1), 1-24.
Maddala, G.S. and S. Wu (1999), “A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test”, Oxford Bulletin of Economics and Statistics, 61(S1), 631-652.
Mahler, V.A. (2004), “Economic Globalization, Domestic Politics, and Income Inequality in the Developed Countries: A Cross-National Study”, Comparative Political Studies, 37(9), 1025-1053.
Neal, T. (2014), “Panel Cointegration Analysis with Xtpedroni”, Stata Journal, 14(3), 684-692.
Obstfeld, M. (1994) “Risk-Taking, Global Diversification, and Growth”, The American Economic Review, 84(5), pp. 1310-1329.
OECD (2010), Measuring Globalisation: OECD Economic Globalisation Indicators 2010, available at
Pedroni, P. (1999), “Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors”, Oxford Bulletin of Economics and Statistics, 61, 653-670.
Pedroni, P. (2004), “Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with An Application to the PPP Hypothesis”, Econometric Theory, 20(3), 597-625.
Pesaran, M.H. (2004), “General Diagnostic Tests For Cross Section Dependence in Panels”, CESifo Working Paper No. 1229.
Pesaran, M.H. (2007), “A Simple Panel Unit Root Test in the Presence of Cross-Section Dependence”, Journal of Applied Econometrics, 22(2), 265-312.
Potrafke, N. (2013) “Globalization and Labor Market Institutions: International Empirical Evidence”, Journal of Comparative Economics, 41, 829-842.
Potrafke, N. (2015) “The Evidence of Globalization”, The World Economy, 38(3), 509-552.
Rodriguez, F. and D. Rodrik (2000), Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence, in: B.S. Bernanke, K. Rogoff (Eds), “Nber Macroeconomics Annual 2000”, vol. 15, available at
Rodrik, D. (2007), “Saving Globalization from its Cheerleaders”, Journal of International Trade and Diplomacy, 1(2), 1-33.
Vamvakidis, A. (2002), “How Robust is the Growth–Openness Connection? Historical Evidence”, Journal of Economic Growth, 7(1), 57-80.
Villaverde, J. and A. Maza (2011), “Globalization, Growth and Convergence”, World Economy, 34 (6), 952-971.
Westerlund, J. (2007), “Testing for Error Correction in Panel Data”, Oxford Bulletin of Economics and Statistics, 69(6), 709-748.
Wood, A. (1998), “Globalisation and the Rise in Labour Market Inequalities”, Economic Journal, 108(450), 1463-1482.
Wooldridge, J.M. (2010), Econometric Analysis of Cross Section and Panel Data,The MIT Press.
World Bank and International Monetary Fund (2007) “Aid For Trade: Harnessing Globalization for Economic Development”, Paper prepared by the Staff of the World Bank and IMF, August 2007, available at
Ying, Y.H., K. Chang and C-H. Lee (2014), “The Impact of Globalization on Economic Growth”, Romanian Journal of Economic Forecasting, 17(2), 25-34.