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Causal Linkages among the Product Diversification of Exports, Economic Globalization and Economic Growth
Author(s) -
Gözgör Giray,
Can Muhlis
Publication year - 2017
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12301
Subject(s) - diversification (marketing strategy) , economics , globalization , causality (physics) , economic globalization , panel data , granger causality , economic interdependence , international economics , international trade , monetary economics , macroeconomics , econometrics , market economy , geography , business , physics , marketing , quantum mechanics , archaeology , china
This paper examines causal relationships between economic globalization, the three indices for product diversification of exports (Theil index, intensive margin and extensive margin) and economic growth in the unbalanced panel data framework in 139 countries over the period 1970–2010. We also consider the subgroup of the countries related to the income levels and run the panel Granger non‐causality tests for heterogeneous panels. The empirical results indicate that there is a bidirectional causal relationship between economic globalization and economic growth. There is also a significant causal relationship that runs from all three indices for the diversification of exports to economic growth. After implementing various robustness checks, we observe that diversification of exports and economic globalization are positively related with economic growth merely in the upper middle economies.