Linkages between different types of globalization and socio-economic variables: panel data analysis for 129 countries

Abstract

Present study explores the linkages between three categories of globalization to socio-economic indicators, which include poverty, inequality, unemployment and Human Development Index (HDI) using the sample of 129 countries over the period 1990 to 2019. The results show presence of co-integration among socio-economic variables and three categories of globalization. The findings indicate that economic, political and social globalization is positively related to each other. It is worth mentioning that all the three types of globalization decreases poverty but the role of economic dimension is appeared to be insignificant. Some negative effect of globalization on inequality and unemployment is also reported by this study. The traditional link between inequality, poverty and unemployment in the presence of globalization show that these three variables are closely related to one another, deterioration in any one variable has adverse effect on other two variables. Furthermore, results of Vector Error Correction Mechanism (VECM) show that socio-economic variables not only cause each other but they also improve human welfare that is measured by HDI. Long run causality indicates that all variables cause each other as error correction term is significant.