Exploring the links between financial flows and economic growth: a panel ARDL approach

Purpose Globalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This corresponds to subject that can be criticized through its impact on national economies. On the other hand, world economy is evolving liberalized environment which foreign direct investment plays fundamental role economic development of each country. The advent financial flows – investment, remittances official assistance key factor economy. purpose this study analyze effect growth developing countries. Empirically, different approaches have been used. As part study, attempt was made use combined autoregressive distributed lag (ARDL) panel approach short-term long-run effects growth. results indicate ambiguous effects. Economically, depends investor’s expectations. Design/methodology/approach To short-run growth, paper considers empirical based ARDL. model makes it possible distinguish between one. type three estimators, namely, mean group, pooled group (PMG) dynamic fixed effect. Findings Results confirm existence relationship because adjustment coefficient (error correction parameter) negative statistically significant. finds PMG estimator more consistent efficient. In short-run, do negatively affect no significant long-run. short-run. However, Finally, suggest insignificant; both Originality/value interaction some methodology are used such as data vector (VAR) model. we apply ARDL for flow objective heterogeneity long-term.