Globalization and Financial Markets: Evidence from Selected Developing and Development Countries

The formation of global markets through the process of globalization has always been one of the main concerns of economic experts in the world. In fact, in the efficient economic markets, this relationship is wider every day, and the situation is the way that the expansion of globalization as an economic accelerator can lead to the growth of the economic sectors of the countries. The purpose of this paper is to determine the effect of globalization index on financial markets (money and capital markets). To this end, 10 selected developing countries and 15 developed countries were reviewed during the period from 2001 to 2020. In order to estimate the effects of variables, the panel's cointegration technique with Auto Regressive Distributed Lag was used. The results of the estimates indicate that the effect of the globalization index combination on the indicators of money market (banking facilities) and capital market (value of equity shares) is positive. On this basis, it can be noted that globalization can provide spaces for the development of money and capital markets in the studied countries.