Abstract:

Purpose: The objective in this paper is to discern the financial integration impact on economic growth by estimating the correlation type in three different samples of countries and discussing the implications that may result. Design/Methodology/ Approach: We will be based on the work of Edison et al. (2002 a) and Klein and Olivei (2008) to use the reference model for three samples such as the MENA region, the developed and the developing countries during a study period from 1982-2022. Our database is collected from the World Bank, the International Monetary Fund, the Central Bank and the Higher Statistical Institute of each country, International Financial Statistics and Statistical Economic and Social Research and Training center of Islamic Countries. Findings: The results show that the consumer price index has a negative and significant impact on the national wealth of each developing country except for the economies of Germany, Denmark and Canada. Also, external indebtedness adversely and significantly affects the economic prosperity of each developed country. On the first hand, foreign direct investment has been a positive factor in economic recovery for these developed countries, and portfolio investment has ensured economic growth in these countries. On the other hand, external openness and the real exchange rate played a decisive role in the economic slowdown in these countries. Originality/Value: This paper fulfils an identified need to study how that financial liberalization and integration have a positive influence on economic growth through productivity and investment .This research shows some differences compared to other previous works in the use of variables and the originality of the sample. Research limitations: The research results may lack of being broad applicable for other samples of countries. Therefore, researchers are encouraged to test the proposed propositions further.