Globalization and its impacts of economic growth in Sri Lanka – empirical study (1987-2016)

Abstract

The current wave of the globalization has opened up new opportunities along with threats for the countries all over the world. After the liberalization Sri Lanka has experienced major policy changes. It bought new opportunities for the international trade and investment to increase their own productive potential to meet the global competition during the second half of the 20th century in Sri Lanka. Even though it create massive opportunities for the trade and transaction, still Sri Lanka facing ecomical challenges day by day. This study seek to analyse the positive as well as the nagative impact of the globalization in Sri Lanka’s economic growth through descriptive analysis and regression analysis. Also, as influencing factors in Gross Domestic product this study use Export (EX), Import (IM), Foreign Direct Investment (FDI), Tourism receipts (TR) and Workers’ Remittances (WR) between the periods of 1987- 2016. This study proves that the estimated coefficient value shows there is a positive relationship between Import (IM), Tourism receipts (TR), Workers’ Remittances (WR) with Gross domestic product (GDP). At the same time the exports (EX) and FDI have negative relationship with gross domestic product (GDP). This findings brought a conclusion that the globalization have a significant positive and negative impacts on gross domestic product.