Research in Globalization (Dec 2024)
Globalization and financial development contributions toward economic growth in Sudan
Abstract
The main objective of this study is to evaluate how globalization and financial development contributed to Sudan’s economic growth using data from 1978 to 2021 by applying the autoregressive distributed lag (ARDL) model. Furthermore, a model to calculate total factor productivity and the contributions of the underlying variables is being developed. The findings from ARDL indicate that globalization and capital display positive and beneficial impacts on Sudan’s economic growth in the long run, implying that an increase of one percentage point in Sudan’s globalization index will, over time, boost economic growth by 1.50408 % and 0.156301 %. Government spending as a control variable was found to influence economic growth positively. Financial development shows a detrimental effect on growth in Sudan. The average productivity growth rate is negative, regardless of the positive contributions of globalization and financial development. This outcome suggests that globalization and capital have been gainful to Sudan’s economy. Therefore, this study advocates that capital accumulation triggers investment, encouraging more global market openness making it easier to access international markets, setting up a strong and sophisticated financial system to assist Sudan’s economic development, and enhancing Sudan’s spending policy to support the productive sectors and encourage domestic production will significantly stimulate economic growth post-war, taking into account additional measures, such as regulations, investment laws, institutional quality, the integration of the banking system, and identifying expenditure prioritizations.
