The effect of financial development in the economic globalization process in iran

Globalization process for each country can be associated with benefits and harms. In the process of economic globalization، economic activity and changes in the definition is not confined to the borders of a country. Also، the role of financial development in the economic growth and private investment issues is undeniable; because economic growth depends on private investment and private investment depends on the development of the financial market. This paper intends to use the system of equations and GMM estimator examines the macroeconomic impact of financial development on Globalization process during the period 1965-2007. Also، in this paper، the variable domestic credit allocated to the private sector is used as an indicator of financial development. According to the result، increase of financial development can through expanding credit to private sector lead to increase private investment and economic growth; also، economic growth can increase export and import and lead to accelerate the globalization process. Therefore it can be said that financial development through growth channel will hasten the process of globalization.