ECONOMIC GROWTH AND GLOBALIZATION: EXAMINING THEIR INTERCONNECTEDNESS IN POST-GLOBALIZED INDIA

Abstract

The literature on globalization produces mixed findings with regard to the impact of globalization on economic growth of countries while also debating if it is economic growth which attracts globalization rather than the other way round. India embarked upon the path of globalization since the introduction of economic reforms in the 1990s. The impact of reforms started being demonstrated in increased pace of economic growth even as the nature and extent of globalization was seen to expand gradually over the years. Three decades of globalization encompassing economic, financial, political, technological and social dimensions, warrants an examination of the causality between globalization and economic growth over the period from 1991 to 2020. The paper examines the causal relationship between globalization, more precisely, its varied indicators across the five dimensions, and economic growth. The analysis has been carried out using the Granger causality test. The results of the Johansen cointegration test suggest that there exists a long-run relationship between globalization and economic growth. The Granger causality test gives a mixed set of results, with two-way causality is the case of some indicators of globalization, and one-way in some other cases.