Nexus between global financial integration and economic growth: An ARDL approach

Mohammad Omar Faruk
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Mohammad Omar Faruk: University of Liège, Belgium

Theoretical and Applied Economics, 2024, vol. XXXI, issue 2(639), Summer, 161-182

Abstract: Scholars propose that global financial integration can boost foreign investment, technology transfer, and economic development, yet it presents challenges like inflation & financial risks. This study explores factors such as FDI, ODA, foreign assets, and external debt, shaping a country's economic growth. Focused on Bangladesh, it employs the ARDL approach for connecting financial integration and economic growth. Findings show significant impacts, with ODA & foreign assets benefiting while external debt & FDI have negative effects. These insights aid policy formulation to optimize foreign capital inflows and mitigate adverse consequences, fostering economic growth, unveiling the relationship between financial openness and development.

Keywords: financial integration; globalization; economic development; ARDL model; external financing. (search for similar items in EconPapers)
Date: 2024
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