Does Globalization Affect Economic Growth? The Role of Financial Development and Capital Use in Pakistan
Muhammad Shahbaz (),
Naceur Khraief (),
Ijaz Ur Rehman and
Khair Uz Zaman
Additional contact information
Ijaz Ur Rehman: University of Malaya, Kuala Lumpur, Malaysia.
Khair Uz Zaman: COMSATS Institute of Information Technology, Pakistan.
International Journal of Economics and Empirical Research (IJEER), 2016, vol. 4, issue 8, 430-449
Purpose: This paper explores the relationship between globalization and economic growth by incorporating financial development, capital use and labor in production function. The study period is 1972-2013 in case of Pakistan. Methodology: We use instability tests newly suggested by Kejriwal and Perron (2008, 2010) as well as the cointegration tests proposed in Arai and Kurozumi (2007) and extended by Kejriwal (2008). Findings: We find that cointegration is present among the series and there is some evidence of instability in cointegrating relationships. Financial development increases economic growth. Capital use adds in economic growth. Labor stimulates economic growth. Globalization (economic, social and political) spurs economic growth. The causality test indicates that globalization Granger causes economic growth. Furthermore, the results of KejriwalPerron tests suggest two breaks at 1976 and 2006 and three regimes. Recommendations: Policy recommendations have been provided.
Keywords: Globalization; Financial Development; Capital; Economic Growth (search for similar items in EconPapers)
JEL-codes: E1 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ijr:journl:v:4:y:2016:i:8:p:430-449
Access Statistics for this article
International Journal of Economics and Empirical Research (IJEER) is currently edited by Dr. Muhammad Shahbaz (PhD Applied Economics)
More articles in International Journal of Economics and Empirical Research (IJEER) from The Economics and Social Development Organization (TESDO) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Shahbaz (PhD Applied Economics) ().