Globalization, Freedoms and Economic Convergence: An empirical exploration of a trivariate relationship using a large panel

Jorge Braga de Macedo, Joaquim Oliveira Martins and Joao Jalles

No 2021/0189, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

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 (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 F11 F13 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-int and nep-isf
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Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp01892021

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