70 © 2022 Conscientia Beam. All Rights Reserved. IMPACT OF GLOBALIZATION ON BANKS PERFORMANCE AND STANDARD OF LIVING IN GCC COUNTRIES: MACRO EVIDENCE BASED ON GMM APPROACH Ruba Al-Jarallah Public Authority for Applied Education and Training, College of Business Studies, Kuwait. Email: ra.aljarallah@paaet.edu.kw ABSTRACT Article History Received: 1 February 2022 Revised: 8 April 2022 Accepted: 26 April 2022 Published: 18 May 2022 Keywords Return on assets Return on equity GDP Economic globalization Social globalization Political globalization. JEL Classification: F01; F6; G20; G21; G23 This research intends to present empirical evidence on the impact of globalization on the banking sector's performance and the standard of living in the Gulf Cooperation Council (GCC) countries. The present study accounts for the several characteristics of globalization. The authors have utilized data of commercial banks in the Gulf Countries (GC) from 1996 and 2017. The return on assets and equity are used to assess the performance of the banks by using the technique of Generalized Method of Moments. It is found that bank profitability is negatively impacted by greater economic, social, and political globalization. However, globalization has a positive impact on GDP per capita in GCC nations, indicating that globalization is beneficial from a living standard point of view. The current research has used population and government effectiveness as control variables, and the findings show that growing population benefits bank ’s returns while government effectiveness has no influence on banking performance. Contribution/Originality: This study distinguishes itself in some respects. It covers three types of globalization to reveal different aspects of globalization in GC. It incorporates the latest data to capture the recent condition in each country. To the best of our knowledge, no study on this topic has been conducted before in GC. 1. INTRODUCTION Globalization is a collection of systems that promote cooperation and interaction among governments, cultures, and economies by allowing people, goods, and ideas to spread throughout the globe (Baloch, Ozturk, Bekun, & Khan, 2021). As a result of globalization, nationalistic notions are replaced by a bigger vision of an interconnected world; where money, goods, and services are freely carried across national boundaries (Al-Khouri, 2010), as the basic goal of globalization is to combine all nations into a single economic entity with no boarders or governments. Moreover, globalization has had major impacts on several sectors, including the GC's economic, social, cultural, and political environments (Panayotou, 2000). Though the supporter of globalization believe that it links economies all around the world through transferring information, commodities, and services, as well as foreign direct investment, technology, and trade (Grossman & Krueger, 1991), globalization also addresses some of the world's most crucial issues (Collier & Dollar, 2002). Globalization is a tidal wave of global changes that is sweeping the planet, but as it is hard to stop it, there are critical steps that can be followed to make it more equitable. Therefore, globalization is considered as a complex problem that requires investigation (Awan, Azam, Saeed, & Bakhtyar, 2020). According to the supporters of globalization, it represents free trade which promotes global economic progress, creates jobs, makes firms more competitive, and lowers consumer prices (Collins, 2015; Paul, 2003). Free trade is International Journal of Business, Economics and Management 2022 Vol. 9, No. 3, pp. 70-83. ISSN(e): 2312-0916 ISSN(p): 2312-5772 DOI: 10.18488/62.v9i3.2995 © 2022 Conscientia Beam. All Rights Reserved.