The Implication of Financial Globalization on the Economic Growth of Cameroon

Abstract

Capital account liberalization characterized by the free flow of capital into and out of an economy, has increased rapidly in recent years. This increase can potentially influence performance in trade, investment and the economy as a whole, through technological transfer. In this respect, this study aimed at examining the effect of financial globalization on the economic growth of Cameroon. The data for the study was collected from the World  Development Indicators of the World Bank and the International Financial Statistics of the International Monetary Fund from 1970-2014. The estimation was carried out using the Ordinary Least Squares Technique. The results of the study showed that financial globalization has a positive and statistical significant effect on the economic growth of Cameroon. Other results indicated that the growth rate of Cameroon rate has been influenced positively by both human and physical capital. The study therefore recommends that government should pursue policies aim at liberalizing the capital account operations.

Keywords: Financial Globalization, Growth, Cameroon