GLOBALIZATION, DEVELOPMENT AND ECONOMIC GROWTH: THE CASE OF EU MEMBER STATES

Globalization is on-going and inevitable process, directly or indirectly touching each country. It causes economic, social and political transformations. Theoreticians who examine the process of globalization split into three groups: globalists, anti-globalists and neutrals. Globalists highlight the benefits of this process, meanwhile anti-globalists emphasize the negative consequences. According to neutrals - globalization process can lead to both - positive and negative outcomes, depending on countries' globalization depth, economic development level and other factors. This study aims to determine i) whether the impact of globalization leads to the EU economic growth; ii) what impact on economic growth have separate dimensions of globalization; iii) whether this effect depends on a country's economic development level. To examine these questions, we used EU member states data over the period 1995 - 2014. To proxy globalization we utilized KOF globalization index. The research revealed that the overall level of globalization does not lead to economic growth in the EU member states. But, the hypothesis that the impact of globalization depends on countries' development level is partially confirmed. The economic integration has no statistically significant impact on relatively less developed EU countries and has positive effect in more developed countries. Social globalization has statistically significant impact on relatively less developed EU countries and has negative effect in the group of more developed ones. It was also found that considerable political engagements have negative effect on growth.