Linkages among Confidence, Governance and Growth in the Era of Globalization-A study of some Asian countries

Abstract

Economies of different countries in the world in the era of globalization have faced multidimensional challenges in managing their growth factors as well as the stake holders of such growth profiles. The political and economic turmoil of the last two decades around the world have opened the eyes of the economic agents like consumers, business houses and the governments of different countries to read and follow the events that are happening over the years. The paper has tried to study the causal relation and linkages among different growth factors like the confidence levels of the consumers and business houses and growth of GDP like economic factors and governance like non-economic factor over a selection of six Asian countries for the period 1996-2010. The study observes that consumer confidence has caused governance quality to change for India, Thailand and S Korea but the irony is that for the first two improving confidence leading to poor governance quality. The bilateral growth – consumer sentiments worked for Thailand. There is another bilateral causality between governance and consumer sentiment that happened in S Korea. Falling governance in China and Thailand has led to rise in business confidence of the countries. But business confidence and growth are no way causally related in any country.