Impact Of Financial Globalization Research Articles

Economic Globalization and Income Inequality: A Review

The potential for economic progress has been constrained in recent decades by growing income disparity. Using panel data methodologies and policy simulations, this study examines the impact of economic globalisation on income inequality in both a cross-country and country-specific context. The sample includes post-liberalization developed, developing, and least-developed nations. The findings reveal that globalisation has reduced inequality in advanced nations while having the reverse impact in low-income ones. Trade and FDI have opposing effects on income distribution; trade makes it worse, but FDI is good for all countries and helps to lessen income inequality. It has been discovered that FDI has a greater effect on lowering income disparity. The effects of economic globalisation on income inequality globally have been examined in a sizable body of econometric work. It is difficult to draw reliable conclusions because stated econometric estimates vary greatly. The link between globalisation and inequality is summarised quantitatively and analysed in this work. Researchers utilise a fresh dataset comprised of 1,254 observations from 123 original studies. Using meta-analysis and meta-regression methods, researchers reach a number of important results. First, there is a small to moderate increase in inequality as a result of globalisation. Second, whereas the impact of trade globalisation is negligible, the impact of financial globalisation on inequality is much larger and substantially stronger. Third, both developed and developing nations see an average increase in inequality as a result of globalisation. Fourth, technology and education mitigate the effects of globalisation on economic disparity.

Exploring the Nexus of Renewable Energy, Ecological Footprint, and Economic Growth through Globalization and Human Capital in G7 Economics

This study used panel simultaneous equations models with a generalized method of moments (GMM) estimator to examine the three-way linkages between ecological footprint (EFP), renewable energy consumption (REC), and income in the Group of Seven (G7) countries over the period 1990–2018. The outcomes of this study demonstrate a two-way association between gross domestic product (GDP) and renewable energy. The findings confirm the presence of a bidirectional link between outcome and ecological footprint, as well as between EFP and renewable energy. The results of this study demonstrate that improving human capital positively and significantly effects income, environmental quality, and REC. Ecological footprint is not significantly impacted by economic and social globalization, whereas the impact of financial globalization is negative and significant. Trade openness is positively and significantly connected with REC and income, which could contribute to reducing environmental deterioration. In conclusion, we make policy recommendations that are based on the findings of the study.

Does economic globalisation promote economic growth? A meta‐analysis

AbstractA large volume of econometric literature has studied the effects of economic globalisation on economic growth around the world. Reported results, however, vary considerably, which makes it difficult to draw valid conclusions. This paper applies meta‐analysis and meta‐regression methods to a novel dataset consisting of 5542 estimates on globalisation–growth effects reported in 516 primary studies. We find evidence for publication selection bias in favour of positive growth effects of globalisation. After correcting for this bias, the size of the effect of economic globalisation on output growth is more than halved, but it remains positive. The growth‐promoting effect, however, is due to trade globalisation, as we cannot reject the hypothesis that the impact of financial globalisation on growth is, on average, zero. The meta‐regression results also reveal that the growth effects of economic globalisation have varied over time, and that education and institutions serve as significant moderator variables.

The Impact of Financial Globalization on the Formation of the European Economic and Monetary Union

The Impact of Financial Globalization on the Formation of the European Economic and Monetary Union

Financial Crisis, Globalisation and Development in Africa

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004–2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent for financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. JEL Codes: F02, F21, F30, F40, O10

Analysis of Empirical Research on the Factors Influencing the Change of Income Inequality

Analysis of Empirical Research on the Factors Influencing the Change of Income Inequality

Impact of globalization on income inequality in Asian emerging economies

PurposeThe purpose of this paper is to examine the impact of three modes of globalization, i.e. trade globalization, financial globalization and technological globalization, separately on income inequality on the Asian emerging economies.Design/methodology/approachThe study uses Hecksher–Ohlin and the Stolper–Samuelson theorem as a theoretical model for the relationship between globalization and income inequality. The study uses pooled least square (POLS) and instrumental variable least square (IVLS) estimation technique but prefers the IVLS over POLS due to the problems of omitted variable biased and endogeneity. Due to unavailability of data for all the Asian emerging economies, the study uses the following 11 countries, i.e. Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Singapore, South Korea and Thailand, from 1980 to 2014 for the trade and technological globalization model and from 1990 to 2014 for the financial globalization model.FindingsTrade globalization significantly contributes to reduce income inequality in the Asian emerging economies. The impact of financial globalization on income inequality suggests that financial integration causes an increase in income inequality. Therefore, the benefits of financial globalization are not evenly distributed among the rich and the poor. The impact of technological globalization significantly contributes in the reduction of income inequality.Practical implicationsGovernment has to invest in research and development activities, establish efficient financial system, reduce trade restrictions and provide subsidies that help to increase the volume of trade.Originality/valueThis study contributes in the existing literature by analyzing the impact of trade globalization, financial globalization and technological globalization on income inequality in Asian emerging economies. The study provides useful guidelines to policy makers and governments to make effective policies in relation to globalization and income inequality that lead toward economic growth and reducing income inequality.

ВПЛИВ ГЛОБАЛІЗАЦІЙНИХ ПРОЦЕСІВ НА ТРАНСНАЦІОНАЛІЗАЦІЮ БАНКІВСЬКОЇ ДІЯЛЬНОСТІ

Розкрито зміст глобалізаційних процесів у фінансовій сфері. Висвітлено як позитивні, так і негативні наслідки фінансової глобалізації для національних банківських систем. Зіставлено інтерналізаційну та еклектичну парадигми створення транснаціональних корпорацій. Виявлено тенденції розвитку банківського сектору в умовах глобалізаційних процесів. Показано діалектичну єдність і протиріччя інтересів глобальних господарських суб’єктів і держав. Дано оцінку впливу процесів транснаціоналізації банківського капіталу на національні банківські системи.

The Impact of Financial Globalization on Indian Financial Market: A Case Study of Regional Rural Bank

The RRBs were set up in India under the RRB Act, 1976 with a view to build up the provincial economy by giving, with the end goal of improvement of agribusiness, exchange, trade, industry and other beneficial exercises in the country zones, credit and different offices especially to little and peripheral ranchers, farming workers, craftsman’s and little business people and for issues associated there with and coincidental thereto. In the underlying stages amid the 1980s, RRBs were viewed as basically taking into account the BPL populace by loaning to them towards meeting their venture needs. Yet, after the obligation waivers of the mid 1990s, the reimbursement issues of the country saving money framework started to be amplified with a consequent withdrawal in the stream of credit to little borrower accounts through the saving money framework. The recapitalization of RRBs amid 1994-2000, alongside a reorientation towards productive working reestablished the fortunes of RRBs. From there on the procedure of amalgamation which was begun in 2005 has brought about the quantity of RRBs being brought down from a pinnacle of 196 to 57 toward the finish of 31 March 2014. The researcher had made a modest attempt in this article to understand the impact of Financial Globalization on Indian financial market with the reference of Regional Rural Banks (RRBs) in the two main district of Uttar Pradesh.

Факторы воздействия финансовой глобализации на формирование инвестиционной политики регионов России

Факторы воздействия финансовой глобализации на формирование инвестиционной политики регионов России

Actual problems of development of the banking sector in the economy of Kazakhstan

The article deals with topical issues to develop the banking sector in Kazakhstan as their condition assessment, weaknesses, strengths, problems and basic ways of development of Kazakhstan’s second-tier banks in the current environment, these issues are discussed in this article and determine the relevance of the material presented. The need to address the main problems in the development of the banking sector is due to the fact that it is represented as a fundamental element of the financial system. Moreover, under the modern conditions, it is subject to the impact of financial globalization, crisis phenomena in the world economy, the growth of uncertainty in the world financial market, which determines a number of negative consequences for the stable development of banking activities. Effective functioning of the banking system allows ensuring the sustainable economic development of any state, as the banking sector participates in the redistribution of funds and financing of the real sector of the country’s economy. At the present stage of the development, the issues of dealing with the key problems of the development of the banking sector acquire special relevance on a global scale, since the financial crisis has revealed the shortcomings of the current system of banking regulation and supervision. In this regard, in the crisis conditions, the state intervention in regulation of banking activities has intensified, the role of risk management in commercial banks has increased, the requirements to the bank’s capital, and the quality of assets has increased. Volatility and instability of the world financial markets require the search for new approaches in the implementation of banking activities to maintain sustainable development, increase margins in the banking business, which determines the relevance of this study. The main results of the research show the influence of external and internal factors that inhibit the development of banking activity.

Financial globalization and economic development

The purpose of this paper is to evaluate the impact of financial globalization on economic growth. Advantages and disadvantages have been analyzed, applying various theoretical aspects, as well as empirical data for the period of 2000-2011

Impact of Financial Globalization on Banking Risks

Financial globalization definitely has an overall effect on globalization in the banking sector. This is reflected in averaging of banking risks for all parties, which occurs due to the impact of the markets, economies, private corporations and monopolies as well as states on each other. As a result, just the opposite priorities in monetary policy may have the same beneficial effect. The aim of the study is to develop conceptual scientific and methodological research areas concerning diversification of banking risks in the context of financial globalization. As part of a comprehensive analysis of the resulting indicators of financial and economic activities of the Russian banking sector, the authors have assessed the key financial performance of the major lending institutions of the Russian banking system in order to identify the dependence of the Russian banking sector on external factors. Financial globalization in general, of course, affects the globalization in the banking sector in particular. This is reflected in averaging banking risks for all parties to the process as a result of the integrative impact of markets, economies, private corporations and monopolies. In this study the authors have presented the mechanism of integrative motion of economic processes with regard to the financial globalization impact on the results of the countries’ monetary policy. Development of market relations and rapid financial globalization lead to permanent transformations of risks that require new approaches and methods of management.

Pre- and Post-Crisis Dynamics of Financial Globalisation for Financial Development in Africa

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004-2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent to financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. Policy implications are discussed.

Uneven effects of financial liberalization on productivity growth in the EU: Evidence from a dynamic panel investigation

This paper investigates the impact of the financial integration process on economic growth. Specifically, in analysing such growth effects, the distinction is made between two growth channels—investment and productivity. Crucially, the analysis tests whether the effects of financial openness on services differ from its effects on manufacturing. Based on a panel of sector-level data (manufacturing and services) from the EU KLEMS database (1980–2009), such effects are estimated in a dynamic panel setting. The main findings suggest that the productivity effects of financial integration, although positive overall, are uneven and they differ between the manufacturing and service sectors. More precisely, the results confirm that the manufacturing sector could profit from the process of global financial integration to a greater extent than services. But the impact of financial globalization on service sectors productivity remains overall positive. On the contrary, capital accumulation was broadly unaffected. Such results remain robust to different sensitivity checks regarding, most importantly, the measurement of financial integration. The findings of the lower productivity impact in services can be understood considering their more intensive skill-biased direction of technological change. At the same time, the strong capital-skills complementarity in services sustained the generation of positive expectations over future productivity growth and attracted financial resources from abroad. As an implication of this research and given the increasing importance of service sectors to modern economic systems, the focus should be placed on searching for more precise channels of long-lasting growth in services. (JEL: F02, F21, F36, F4)

Turning point: International money and finance in Chinese IPE

ABSTRACTUnlike the depth of international political economy (IPE) research on finance and money in North America and Britain/Europe, or the amount of work that has been done inside China on the IPE of international trade, the IPE of global finance and money is still at a nascent stage inside China. The paper examines the evolution of Chinese IPE research on global finance and money and suggests that research in these issue areas appears to be reaching a turning point. The main empirical finding is that this shift in knowledge production has been induced principally by China's emergence as a financial force and the national developmental concerns this entails, as well as by the onset of the 2008–09 global financial crisis and the rise of the emerging economies’ grouping. The growing Chinese scholarship on the IPE of finance and money is adding analytical depth and broadening Chinese IPE, particularly on the impact of financial globalization on developing and emerging economies. While such research will likely contribute to Chinese policymaking in the future, the scholarly test for Chinese IPE is whether and how it will contribute to filling the global knowledge gaps on the determinants of financial and monetary policy, and whether it will give rise to new understandings on global finance and money, especially the causes of international financial crises. Heretofore, much of the literature has been heavily policy-oriented and normative.

The impact of financial globalization and financialization on the economy in the current crisis through banking corporate governance

This work analyzes the role of governance of financial entities in the current crisis. Neoliberal eco nomic policies, deregulation and liberalization have characterized financial globalization, giving rise to the financialization of the economy. This paper, using the analysis-synthesis method, shows that the corporate governance of entities has adapted to the new social environment under the influence of the interests of the investors. The results of this paper suggest the need to monitor the over-emphasis on the maximization of short-term shareholder value without relativizing the risk taken to achieve it, as such, the emphasis on short-term shareholder value is considered a crucial contributing factor to the present crisis.

The Home Bias, Capital Income Flows and Improved Long‐Term Consumption Risk Sharing between Industrialized Countries

AbstractIs financial globalization associated with improved international consumption risk sharing? We focus on the long‐term (that is low frequency) co‐movement of consumption and output in answering this question. Theoretically, the impact of financial globalization should show up first and most robustly in the lower frequencies of the data. We show that this is the case empirically: by the end of our sample period (1960–2007), up to 40% of long‐term idiosyncratic consumption risk is shared between industrialized countries – as compared to less than 10% before 1990. This dramatic increase is associated with a huge increase in international capital income flows: while capital income flows remain relatively limited as a channel of risk sharing at business‐cycle horizons, their contribution to international risk sharing at longer horizons has increased substantially. Much of this increase can be attributed to the growth in international asset positions over the recent globalization period.

Book Reviews

Andrei A. Levchenko of University of Michigan reviews “Financial Globalization, Economic Growth, and the Crisis of 2007?€?09” by William R. Cline. The EconLit Abstract of the reviewed work begins “Examines the role of financial globalization in economic growth and derives corresponding implications for economic policy. Discusses a critical survey of literature; the impact of financial globalization on growth--country-specific estimates; and the financial crisis of 2007-09 and financial globa….”

Financial Globalization and Banking Crises in Emerging Markets

Bank crises in emerging economies have been a feature of the recent global crisis, and their incidence has increased in the post-Bretton Woods era. This paper investigates the impact of financial globalization on the incidence of systemic bank crises in 20 emerging markets over the years 1976-2002 using measures of de facto and de jure financial openness. An increase in foreign debt liabilities contributes to an increase in the incidence of crises, but foreign direct investment and portfolio equity liabilities have the opposite effect. A more liberal de jure capital regime lowers the incidence of banking crises, while a regime of fixed exchange rates increases their frequency. The results of the econometric analysis is consistent with the experience of East European and central Asian emerging markets, which attracted a relatively large proportion of capital flows in the form of debt in recent years and have been particularly hard hit by the global financial crisis.