A note about globalization and development in Ecuador

Abstract

Purpose – The objective of this study is to analyze the long-term impact of globalization on Ecuador’s economic development during the period from 1990 to2021. Design/methodology/approach – The techniques of fully modified least squares (FMOLS), dynamic ordinary least squares (DOLS) and canonical cointegration regression (CCR) were used to assess how globalization, measured by the Konjunkturforschungsstelle (KOF) index, influenced Ecuador’s Human Development Index (HDI). Key control variables such as financial development, health expenditure, gross fixed capital formation, renewable energy and the impact of COVID-19 were included. Findings – The results show that globalization has had a positive and significant impact on economic development, aligning with the neoclassical growth theory. Additional findings indicate that financial development, health expenditure and capital formation positively contribute to economic development, whereas renewable energy exhibits non-significant effects and COVID-19 has a negative impact. Originality/value – This study contributes to the existing literature by providing updated empirical evidence in the context of a developing country and offers recommendations for future research on the differentiated effects of globalization.