Growth Effects of Economic Globalization: A Cross-Country Analysis

This paper analyses the effect of economic globalization indicators on economic growth through the channels of Total Factor Productivity (TFP) by using panel data approach and conducting policy simulations. The analysis is done on cross-country framework comprising developed, developing and least-developed countries in the post-liberalization period. The study also derives country-specific implications for India. The results show that most globalization indicators lead to higher total factor productivity with the exception of imports. Of the globalization indicators, FDI is beneficial for high--income economies and export is important for the low-income economies. The policy simulations prove that India has fared better than some advanced economies despite belonging to the lower-middle-income category which is synonymous with India’s growth story.