Impact of globalization and governance determinants on economic growth: An empirical analysis of Asian economies

Abstract

AbstractGlobalization is an inevitable and irresistible process because many regional integrations emerged in the modern era. A global integration analysis, employing a country’s governance practices, offers various economic benefits and exerts socio‐economic pressures on different economies. This study uses the KOF Globalization Index and Institutional Governance Indicators as explanatory variables and examines their impacts on GDP growth as a dependent variable. The study employed Two‐step System GMM with a sample of 45 Asian economies, with the time horizon from 2003 to 2017. The outcomes show that globalization has positively impacted economic growth, sound regulatory control, and political stability. It further states that practical, feasible, and corruption‐free or transparent economic policies significantly contribute to the economic progression of Asian economies, and help to achieve sustainable development. The study concludes by suggesting that some economic and governance recommendations strengthen struggling Asian economies by addressing the globalization phenomenon tactfully. Future studies can be explored by globalization’s impact on socio‐economic development by taking regional integration as a moderating effect, which controls factors such as governance and institutional quality.Practitioners points The outcomes show that sound regulatory control, political stability, and global integration have positively impacted economic growth. Corruption‐free or transparent economic policies significantly contribute to the economic progression of Asian economies and help to achieve sustainable development. Prudent economic governance practices strengthen struggling Asian economies by approaching the globalization phenomenon prudently.