Globalization, Freedoms and Economic convergence: an empirical exploration of a trivariate relationship using a large panel

Jorge Braga Macedo (), Joaquim Oliveira Martins and Joao Jalles
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Jorge Braga Macedo: Center for Globalization and Governance, Nova School of Business and Economics

International Economics and Economic Policy, 2021, vol. 18, issue 3, No 8, 605-629

Abstract: Abstract Using a large panel for 95 countries and the 1972–2014 period, this paper analyses the interactions among globalization, political & civil rights and economic convergence, through a simultaneous estimation technique. We use a multi-dimensional, de facto, and continuous measures of Freedoms and Globalization. We find a two-way positive relationship between civil liberties & political rights and economic, political and social Globalization, as well as significant two-way relationships with the economic convergence (using as a proxy the ratio of GDP per capita to the US). In this way, we extend the test for the two-way relationship between Democracy and Globalization put forward by Eichengreen and Leblang (Econ Politics 20(3):289–334, 2008). Overall, we also find a virtuous cycle between Globalization, Freedoms and Economic convergence, except for non-OECD countries at early intermediate stages of development. This positive systemic effect can be put into question by the recent negative shocks on Globalization and Freedoms related to the Covid-19 pandemic.

Keywords: globalization; democracy; freedoms; development; convergence; panel data; three-stage least squares (search for similar items in EconPapers)
JEL-codes: F02 F10 F13 F63 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Globalization, Freedoms and Economic Convergence: An empirical exploration of a trivariate relationship using a large panel (2021)
Working Paper: Globalization, Freedoms and Economic Convergence: An empirical exploration of a trivariate relationship using a large panel (2021)
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DOI: 10.1007/s10368-021-00512-7

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