Advanced Research in Economics and Business Strategy Journal
Volume 6, Numéro 2, Pages 336-353
2025-12-31
The Impact Of Globalization Dimensions On Macroeconomic Performance In Saarc Countries: A Panel Data Analysis
Authors : Yadav Mani Upadhyaya Yadav . Lal Bahadur Oli Lal .
Abstract
This research investigates the effects of globalization—economic, social, and political—upon the macroeconomic performance of the member countries of the South Asian Association for Regional Cooperation (SAARC) for the period from 1980 to 2023. An unbalanced panel dataset consisting of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka is generated and used to examine the effects of globalization on GDP growth and inflation, with foreign direct investment (FDI) and trade openness as critical mediating variables. To address cross-sectional dependence, heteroskedasticity, and autocorrelation, panel fixed effects models are employed in the analysis, and robustness of the analysis is assured with unit root testing, cointegration, and diagnostic testing. Our results show that economic and social globalization positively foster growth, with economic globalization having the highest positive impact (coefficient = 0.089***). Additionally, we find that FDI and trade openness have significant positive impacts on growth, while political globalization does not have a significant positive or negative relationship with it. Consistent with the disciplining hypothesis, our inflation model shows that trade openness has a significant disinflationary impact (coefficient = -0.042***), while FDI has a positive impact on inflation (coefficient = 0.124**), likely due to demand-side risks. Our study suggests that member countries of SAARC must continue to strategize and integrate into the global economy. For policy implications, countries should design initial macroeconomic resilience by insisting on fiscal discipline, maintaining foreign exchange buffers, and diversifying the economy to minimize the impact of volatility in the global economy.
Keywords
Globalization ; economic growth ; inflation ; FDI ; trade Openness ; SAARC ; panel data
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