Nexus between global financial integration and economic growth: An ARDL approach

Abstract

Scholars propose that global financial integration can boost foreign investment, technology transfer, and economic development, yet it presents challenges like inflation & financial risks. This study explores factors such as FDI, ODA, foreign assets, and external debt, shaping a country’s economic growth. Focused on Bangladesh, it employs the ARDL approach for connecting financial integration and economic growth. Findings show significant impacts, with ODA & foreign assets benefiting while external debt & FDI have negative effects. These insights aid policy formulation to optimize foreign capital inflows and mitigate adverse consequences, fostering economic growth, unveiling the relationship between financial openness and development.

Keywords

• financial integration
• globalization
• economic development
• ardl model
• external financing