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Advisor(s)
Abstract(s)
This study examines the impacts of globalization and economic freedom on the economic
growth of a group of 24 developing countries from the Latin America and
Caribbean over a time span ranging from 1995 to 2015. We have constructed two
models, one with the globalization’s overall value and another with the political,
social and economic dimensions of globalization. Our results point out to the fact
that globalization has had a positive impact on the economic growth of these countries
in the long-run, as well their economic and social dimensions. Still, the political
dimension of globalization did not show any statistically significant effect upon
growth. In addition, we have found evidence of a negative impact resulting from
economic freedom on the economic growth of these Latin American and Caribbean
countries in the long-run. In the short-run, the results have indicated that electric
power consumption (in all estimations) and social globalization (in only one estimation)
were able to promote the economic growth of these countries. Finally, the
negative and significant coefficient of the error correction mechanism in all estimations
points out to the presence of cointegration/long-memory relationships between
the variables. This study aims to contribute to the enrichment of the globalization-
growth and economic freedom-growth literature in the way that it attempts to
overcome some of the flaws identified in previous studies. In our analysis we have
identified and corrected the presence of outliers, which are quite often neglected,
and if not controlled can actually compromise the macro-economic analysis of this
region. The results from this study should primarily contribute to guide policymakers
in their decisions, thus helping them to draw growth-promoting policies in their
respective countries.
Description
Keywords
Economic growth Economic freedom Globalization Latin America and Caribben countries Outliers