The effect of economic globalization on the ıslands of the ındian ocean: An econometric ana

Abstract

Although economic globalization is a fervent topic, its impacts on islands is rarely discussed. Isolated island economies receive little attention due to their unique characteristics. While some researchers debate the benefits and costs of globalization for developed and developing countries, this study uses a co-integration and causality approach to look at the economic impact of globalization on the Indian Ocean islands from 1980 to 2020. The panel data analysis shows that trade openness has a negative effect on growth. Thus, islands should prefer an import-substitution policy over an exportpromotion policy. Both foreign direct investment and population growth are beneficial to the economy. Hence, FDI restrictions should be reduced, and the educational system should be improved. Finally, financial assistance has a negligible impact on growth.For the island of Comoros, only population affects growth. Thus, a continuous learning advancement should be promoted. Since trade has an impact on Madagascar and Sri Lanka's growth, trade barriers should be lowered. For Maldives, the higher the GDP, the greater the inflows of foreign investment. Mauritius should focus on a diversification policy that emphasizes promoting disruptive ideas. Seychelles demonstrates that growth attracts financial aid. Globalization is a fast-growing process. Countries employ efficient production techniques and competitive strategies to capture the markets. Islands can invest in technology to maintain their global connection and use a diversification policy so that the economy does not collapse in times of crisis.