LAUSR

Abstract This empirical study provides new insight into the nexus between Dutch disease, globalization, and financialization for resources-rich economies from 1990 to 2018. This study uses a novel index for financial development developed by an international monetary fund (IMF). Moreover, remittances inflow, if it negatively affects financial development, is indicated as Dutch disease. Further, the effect of economic globalization on financial development is also tested. This study employed advanced panel data econometric techniques. The empirical outcomes suggest that increasing inflow of remittances mainly contributes to the non-real sector of the economy, causing to lower financial development. Moreover, economic globalization is found to promote financial development. The effect of gross domestic product and human capital on financial development is positive. This study suggests that these resource-rich countries should regulate the inflow of remittances in such that it contributes to financial development. Further, the promotion of human capital and openness is considered a helpful factor for avoiding Dutch disease.