GLOBALIZATION and ECONOMIC GROWTH in Cambodia

For the past two decades, since the political situation became stable, Cambodia has recorded a very rapid economic growth rate. In the meantime, globalization has progressed both in terms of the expansion of international trade and foreign direct investment (FDI) inflows. This paper applies small sample cointegration tests and error correction models to reveal the determinants of Cambodia's rapid economic growth. The cointegration test results support the existence of a long-run equilibrium relationship among the variables concerned. The error-correction models show that expansion of international trade values has caused the rapid economic growth in Cambodia, regardless of the measure of international trade used.