Globalization and banking crises: The case of developing economies

Abstract

Introduction Globalization and the problems it brings have a significant impact on the countries in economic, political, and social aspects. In this context, the necessity of addressing globalization in three different dimensions is of great importance in the economics literature. While globalization is defined from an economic perspective as the removal of any physical and legal boundary that may prevent the international circulation and the accumulation of capital (Adda, 2013), it can be defined from a socio-cultural perspective as transformation of the world into a single-cultural structure by eliminating different cultures of different societies and making people more dependent on each other (Giddens, 2001). Moreover, political globalization can be defined as the destruction of international markets by taking over the functions of political systems and replacing them (Beck, 2009). Thus, the leading indicators used to determine the socio-economic and political impacts of globalization are political, cultural, and geographic boundaries, social socio-economic commitment, multinational firms, depoliticization, and democracy (Saritas, 2017). In the light of these indicators, the increase in the international trade volume, the increasing financial depth in the economies of the country and the hot money movements brought by it, and the cross-border demands on production shape the economic dimension of globalization in the triangle of trade, finance, and production. In this study, the impact of globalization on banking crises is analyzed within the context of socio-cultural, economic, and political globalization indicators. Social globalization index, political globalization index, and economic globalization index are…. © Peter Lang GmbH Internationaler Verlag der Wissenschaften Berlin 2019.