Does Globalization Affect Financial Development? Empirical Evidence from Panel Data Analysis

Sümerli Sarıgül S., Altay Topcu B., Çetin M.

7 th International Conference on Frontiers in Academic Research ICFAR 2026, Konya, Türkiye, 15 - 16 Mart 2026, ss.251-258, (Tam Metin Bildiri)

  • Yayın Türü: Bildiri / Tam Metin Bildiri
  • Basıldığı Şehir: Konya
  • Basıldığı Ülke: Türkiye
  • Sayfa Sayıları: ss.251-258
  • Kayseri Üniversitesi Adresli: Evet

Özet

This study explores the role of economic globalization in shaping financial development across

a panel of 20 developing countries during the period 1994–2022. The empirical specification also considers

several control variables, including economic growth, oil consumption, and the level of urbanization. Prior

to conducting the main estimations, cross-sectional dependence and slope heterogeneity tests are applied to

verify the suitability of the panel data framework. The results of the Westerlund cointegration analysis

confirm the presence of a stable long-run relationship among the variables under consideration. Long-run

parameter estimates obtained from the FMOLS and DOLS techniques indicate that economic globalization,

income per capita, and oil consumption exert positive and statistically significant effects on financial

development. Conversely, the findings suggest that urbanization has a negative association with financial

development. Taken together, these results imply that while globalization can foster the expansion of

financial systems in developing economies, its benefits are more likely to emerge in the presence of strong

institutional frameworks and stable macroeconomic environments.

Keywords: Globalization, Financial Development, FMOLS, DOLS