Impact Of Globalization On Economic Growth

2.3 Empirical Review

The review of empirical evidence will begin with studies based on evidence from other countries before examining the evidence from Nigeria.

2.3.1 Evidence from the International Community

Empirically, the impact of globalization on economic growth has been greatly researched. The existence of a positive relationship between openness and economic growth was first posited by Dollar (1992). A measure of outward orientation was used to ascertain the relationship between openness and economic growth. The measure of the outward orientation of an economy was developed using a cross country index of real exchange rate distortion based on the international prices comparison as prepared by Robert Summers and Alan Heston. Using

The author developed a comprehensive index of globalization known as the KOF globalization index, covering three major aspects of globalization i.e. economic integration, social integration and political integration. Using an objective statistical technique twenty-three variables are reduced to three sub-indexes which in turn is aggregated into a single globalization index. The study revealed that the economic and social aspect of globalization have a positive effect on economic growth while the political aspect does not affect growth. Specifically, on the average the more globalized a country the higher the growth rate. In concluding however, Dreher stated that all things being equal for poor countries the globalization of their economies to induce growth rates and poverty reduction is not enough. In examining the relationship between economic growth and globalization in Romania Mutascu and Fleischer (2011), used an unrestricted vector autoregressive model for the period 1972 to 2006. The study was based on just two variables namely the real annual growth rate of GDP and the KOF index of globalization as developed by Dreher. Their result shows that globalization advances economic growth however, they also conclude by stating that this can also lead to the loss of national economic sovereignty which has its

The study utilizes the autoregressive distributive lag model while adopting the augmented dicky fuller test for the elimination of unit root to analyze the impact of the economic, social and political dimensions of globalization on economic growth in Pakistan. Their findings show that in the long run economic globalization has a positive impact on economic growth; the impact of social globalization is negative while that of political globalization is insignificant. In the short run they discovered that economic globalization has a negative relationship with growth at lag 1, with social globalization also showing a negative relationship while political globalization has no relationship with growth. They therefore recommend the formulation of policies that will foster