Globalization and Financial Markets: Evidence from Selected Developing and Development Countries

Subject Areas : Computational economics

Seyed Ali Paytakht Oskooee ¹ , Mohsen Zayanderoodi ²

1 - IAU
2 - IAU

Received: 2022-05-01 Accepted : 2022-05-01 Published : 2022-02-20

Keywords: Financial Markets, Panel cointegration technique, Combined Index of Globalization,

Abstract :

The formation of global markets through the process of globalization has alwaysbeen one of the main concerns of economic experts in the world. In fact, in theefficient economic markets, this relationship is wider every day, and the situation isthe way that the expansion of globalization as an economic accelerator can lead tothe growth of the economic sectors of the countries. The purpose of this paper is todetermine the effect of globalization index on financial markets (money and capitalmarkets). To this end, 10 selected developing countries and 15 developed countrieswere reviewed during the period from 2001 to 2020. In order to estimate the effectsof variables, the panel's cointegration technique with Auto Regressive DistributedLag was used. The results of the estimates indicate that the effect of theglobalization index combination on the indicators of money market (bankingfacilities) and capital market (value of equity shares) is positive. On this basis, it canbe noted that globalization can provide spaces for the development of money andcapital markets in the studied countries.