The Role of Financial Development in Globalization: Evidence from a Global Panel

The present thesis examines the role of financial development in globalization using the global panel dataset. Annual data that ranges from 1980 to 2014 has been used for selected 181 countries. Panel econometric procedures generally reveal that financial markets have a positive impact on economic, political, and social globalization as proposed by the KOF classification criteria. However, when macroeconomic fundamentals such as national income, inflation, capital, and population growth are taken into consideration this effect sometimes becomes negative depending on the type of macroeconomic factor and methodology used. This study concludes at the end that financial development is significant driver for globalization all around the world.