For more than 1,500 years, Europeans traded glass and manufactured goods for Chinese silk and spices, contributing to a global economy in which both Europe and Asia became accustomed to goods from far away. Swiss Economic Institute. The current version of the data published by the Swiss Economic Institute is revised by Gygli et al. The role of electricity consumption, globalization and economic growth in carbon dioxide emissions and its implications for environmental sustainability targets. Finally, gdp is real GDP per capita (constant 2010 $) and it is provided from World Bank World Development Indicators. Correspondence to World Bank (2019). This method considers cross-sectional dependence and can be used, while the series are integrated in the same order. 2020). Compared to theoretical discussions, previous literature provides a lack of empirical evidence. There are several reasons why this might be the case, including: Access to labor: Globalization gives all nations access to a wider labor pool. The results show that a 1% increase in globalization index increases life expectancy %0.014 and %0.015 according to CUP-FM and BA-OLS estimators, respectively. Text on this page is printable and can be used according to our Terms of Service. cultural globalization, phenomenon by which the experience of everyday life, as influenced by the diffusion of commodities and ideas, reflects a standardization of cultural expressions around the world. 4, \({\stackrel{\sim }{\beta }}_{i}\) and \({\overbrace{\beta }}_{WFE},\) respectively, indicate the parameters obtained from pooled OLS and weighted fixed effects estimation, while \({M}_{T}\) is the identity matrix. As expected, poverty rates significantly reduced in the last two decades because of the integration of developing economies to global markets (Harrison 2006). Freedom House (2019). Therefore, the positive impact of globalization on health first emerged with its positive effects on economic growth (Labont et al. Globalization pros and cons: economic, cultural, political Competition Competition in the market is largely due to globalization. Improved fiscal policies within countries and international trade agreements between them also facilitate globalization. Therefore, economic development and improvement of health conditions represent a two-way process. Migration is also another fact to take into account. Kabir (2008) analyzed the determinants of life expectancy in 91 developing countries. World Bank Income Groups MDGs Index Values in 2015. Sustainable Development Goal Indicators. Income distribution and life expectancy: A critical appraisal. They write new content and verify and edit content received from contributors. As part of the North American Free Trade Agreement (NAFTA), U.S. automobile companies relocated their operations to Mexico, where labor costs are lower. They also suffer from bad health conditions such as low life expectancy, communicable diseases, and high mortality rates according to MDG indexes given above. Their results show that globalization, financial development, and economic growth affect life expectancy positively in 14 of 16 Sub-Saharan African countries. Pesaran and Yamagata (2008) proposed a method to examine slope heterogeneity in panel data analysis based on the Swamy (1970)s random coefficient model. In addition, ignoring the cross-sectional dependence results in inconsistent estimations. The first one blames globalization and argues that poverty and as a result of this, low life expectancy derives from the inequality created by globalization itself (Buss 2002). Evidence from a new index of globalization. Increasing the social welfare level is a complex process that depends on economic and non-economic factors. Also, the child mortality rate was reduced by 53% and maternal mortality by 43% (WHO 2016). Globalization is a process of growing exchange, interaction and integration between people, governments and private organizations across the globe. There are approaches known as the unequal exchange that globalization increases inequality among countries and that developed countries are more profitable from the globalization process (Love, 1980). The relationship also occurs for men, while GDP per capita dropped from the regression model due to high collinearity. Second, the panel data analyses are based on the first-generation estimators that assume cross-sectional independence. Buss (2002) claimed that the intellectual property rights of advanced drugs belong to private firms in developed countries, and because of the strong protection of property rights, less developed countries have trouble accessing them. There is a long-run relationship between life expectancy, globalization, democracy, and GDP per capita. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. (2015). These techniques are robust whether N>T and T>N. Therefore, \({CD}_{LM}\) and bias-adjusted LM (\({LM}_{adj})\) tests are found to be appropriate and their test statistics can be calculated as follows: Equation 2 shows the calculation of Pesaran (2004) \({CD}_{LM},\) and Eq. 2011). In addition, democracy improves child health and it also increases the beneficial effects of globalization on child health. BLM Factors related to globalization can also cause workers to migrate from their homelands in poorer countries to more developed countries to find work. Social Indicators Research, 129(3), 11551170. (2000). (2008). Health outcome measures of this study are infant mortality and life expectancy. Swamy, P. A. It is an important instrument in the suppression of the inequality created by economic globalization. This leads to the reallocation of resources to solve the primary problems of the society. Previous studies mostly focused on how to achieve SDGs, while possible conflicts between the goals were mostly ignored especially in the context of health. In democracies, governments have an obligation to account to citizens for what purposes the resources were used. Another example is Vietnam, where globalization has contributed to an increase in the prices for rice, lifting many poor rice farmers out of poverty. Economic Growth It's widely believed that increased globalization leads to greater economic growth for all parties. If you have questions about how to cite anything on our website in your project or classroom presentation, please contact your teacher. Australian Economic Papers, 58(4), 444479. Franco, ., lvarez-Dardet, C., & Ruiz, M. T. (2004). In the selection of stationarity tests and long-run estimators, the existence of cross-sectional dependence will be decisive. Democracy can be considered as another determinant of life expectancy. Achieving economic development or increasing the level of welfare depends on achieving and sustaining the main objectives in political, economic, and social areas. In the analysis of panel data, the estimators considering cross-sectional dependence are called the second-generation estimators. In the equation above, V(k) is the estimated variance of \({\widehat{u}}_{it}\) based on k factors. Policy makers should remove the barriers on globalization, and they should promote participation on international organizations and publicprivate and civil society partnerships. Thus, resources can be allocated to solve important public issues such as quality of life, communicable diseases, and mortality. \({\stackrel{\sim }{Z}}_{it}\)=k and \(Var\left({\stackrel{\sim }{Z}}_{it}\right)=2k(T-k-1)/T+1\). Cohen, M. S., Chen, Y. Q., McCauley, M., Gamble, T., Hosseinipour, M. C., Kumarasamy, N., & Godbole, S. V. (2011). Positive And Negative Effects Of Globalization In Spain As Dreher (2006) mentioned, despite its possible inequality effects, the net effect of globalization on development is mostly positive and our empirical work supports that idea. One may think about unhealthy conditions of an urban area such as environmental degradation, air and water pollution, higher crime rates, and stress which reduce life expectancy. Sustainable Development, 27(4), 545572. As stated in the introduction section, low-income countries show low performance in terms of health-related sustainable development goals, and their connections with global markets are weak compared to other countries. Cutler, D., Deaton, A., & Lleras-Muney, A. Globalization also gives organizations the opportunity to take advantage of lower labor costs in developing countries, while leveraging the technical expertise and experience of more developed economies.With globalization, different parts of a product may be made in different regions of the world. The ignorance of cross-sectional dependence results in biased and inconsistent estimates and wrong inferences (De Hoyos and Sarafidis 2006; Chudik and Pesaran 2013). Globalization | Examples, Impact, & Pros and Cons | Britannica These days we experience the coronavirus epidemic and we see once again the importance of globalization. The hope is that increased global trade will lead to more competition, which will spread wealth more equally. These results show that the methods to be used in the analysis of the stationarity of the variables and the determination of the long-run relationship should consider the cross-sectional dependence. Please refer to the appropriate style manual or other sources if you have any questions. Second, empirical works in previous literature consist of traditional estimation methods called first-generation tests.
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