The relationship between trade and financial openness and economic growth in OECD countries

The concept of openness, which is seen as an economic dimension of globalization, is divided into three as commercial, financial and labor openness. In this study, the relationship between trade and financial openness and economic growth in OECD countries between 1990 and 2020 was tested with panel data analysis methods. In the first part of this study, definitions, history, approaches and dimensions of globalization are given. In addition, there are explanations about the definitions, sources and theories of growth. In the second part of the study, information about the definitions of openness, measurement methods, and commercial and financial liberalization theories are given. In the last part of this study, after the literature review, cross-section dependency and homogeneity tests between the variables were performed. After determining the cross-sectional dependence, it was also determined that the variables were homogeneous. In the next process, the stationarity of the series was tested by means of CADF and PANKPSS tests. After it was determined that the series were stationary, a long-term relationship was determined between the series according to the results of the structural break panel cointegration test. The long-term coefficients of the variables were determined by the CCE estimator. In the long run, trade and financial openness variables have a positive effect on economic growth. Finally, the causality relationship between the series was tested by the Dumitrescu and Hurlin test. According to the test results, there is a bidirectional relationship between trade openness and economic growth. A unidirectional causality relationship was found from financial openness to economic growth and trade openness.