Does Institutional Quality Strengthen the Globalization-growth Nexus? A Cross Country Analysis

Abstract In this study, we examine the role of institutional development in the globalization growth nexus. We have used the System GMM technique for a sample of 124 countries from 1996 to 2019. We found that countries with improved quality of institutions get more benefited from economic globalization. Hence, policy complementarities are the pre-requisites for the relationship between economic globalization and growth. Through analysis of the marginal effect, we found a minimum threshold level of institutional quality. This study also performs sensitivity analysis by comparing the results of the different econometric techniques. Consequently, we have run hundreds of regressions with various growth models to get the most stable and robust model.