measuring globalisation a new globalisation index (ngi) petra vujakovic joint vienna insitutute
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Measuring Globalisation
A New Globalisation Index (NGI)
Petra Vujakovic
Joint Vienna Insitutute
Introduction
Why measure globalisation?
Defining Globalisation Varied discussions in literature, no clear and
commonly accepted definition.
The process of growing interdependence of economies, societies and nations across large distances.
Globalisation Indices - Overview G-Index (World Markets Research Centre) A.T. Kearney / Foreign Policy Globalization
Index KOF Globalization Index (ETH Zürich) GlobalIndex (Transeurope-Project) CSGR Globalisation Index (Warwick University) Maastricht Globalization Index (Universiteit
Maastricht)
Innovations in the NGI 5 new variables
Introduction of distances International trade in goods weighted with geographical
distances globalisation vs. regional integration
Dimensions of globalisation generated through a statistical process Search for indicators based on a priori defined theoretical
spheres of globalisation Grouping the indicators together with help of PCA – new
dimensions or a confirmation of the theoretical ones?
Methodology
Innovations in the NGI 5 new variables
Introduction of distances
Dimensions of globalisation generated through a statistical process (PCA)
5 New Indicators Portfolio stock Trademark applications by non-residents Patent applications by non-residents Outgoing students International environmental agreements
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21 variables in NGI Hard data Output data
Countries: 70 Years: 1995-2005
Innovations in the NGI 5 new variables
Introduction of geographical distances
Dimensions of globalisation generated through a statistical process (PCA)
Geographical Distances
EU regional trade
Innovations in the NGI 5 new variables
Introduction of geographical distances
Dimensions of globalisation generated through a statistical process (PCA)
Building of the Dimensions (PCA) (1)
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Building the Dimensions (PCA) Extraction of 3 factors After rotation, individual variables load largely
to one of the 3 factors
(1) FINANCE (2) TRADE & POLITICS (3) SOCIAL
FDI stock trade in goods trade in services
FDI flow trademarks migration
portfolio stock patents tourism
portfolio flow transfers telephone
income payments env. agreements books
internet int. organizations newspapers
embassies outgoing students
peacekeeping
Results
Top 10 (1) Year 2005
RANK COUNTRY
1 Ireland
2 Switzerland
3 Netherlands
4 Belgium
5 Malta
6 Cyprus
7 Iceland
8 United Kingdom
9 Austria
10 Sweden
Small countries still in the top
Exclusively european „club“ 6 old EU countries new EU (Malta, Cyprus) EEA: Iceland +
Switzerland
Top 10 (2)
COUNTRY Rank
FIN
TRADE POL
SOC
Ireland 1 2 39 2
Switzerland 2 3 14 5
Netherlands 3 1 9 20
Belgium 4 5 2 10
Malta 5 6 29 4
Cyprus 6 14 56 1
Iceland 7 4 47 13United Kingdom 8 9 4 19
Austria 9 12 16 6
Sweden 10 7 13 17
Financial positions correlate highly with the final results All in top 15
Developed EU Top 20 in all 3
subindices „newer“ and non-EU
have lower rankings in trade/pol subindex Ireland, Malta, Cyprus
and Iceland not in top 20
High positions due to financial flows and social interconnectedness
Year 2005
Contributions of individual dimensions differ across countries
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Comparison of NGI with KOF Index results
Top 10 6 same countries in top 10
Island countries move forward - Malta, Cyprus, Iceland and UK
Islands have no direct neighbours
New variables show international integration (Trademarks, Patents, Environmental Agreements)
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Country NGI KOF Difference
Ireland 1 7 6Switzerland 2 3 1Netherlands 3 4 1Belgium 4 1 -3Malta 5 22 17Cyprus 6 16 10Iceland 7 32 25United Kingdom 8 24 16Austria 9 2 -7Sweden 10 6 -4
Big Developed Countries
No significant changes
UK upwards – politics and financial stocks
Spain and Japan downwards – „restrictions“ variable, double counting
Low ranking of Japan – social indicators very low
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Country NGI KOF Abweichung
United Kingdom 8 24 16Canada 12 8 -4France 15 12 -3Germany 17 20 3New Zealand 21 18 -3Spain 22 14 -8Australia 23 26 3Italy 27 25 -2USA 32 35 3Japan 59 50 -9
New EuropeGenerally lower positions than in KOF Index
smaller countries corrected for country size
lower scores in international financial stocks and new variables
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Country NGI KOF Difference
Malta 5 22 17
Cyprus 6 16 10
Estonia 14 13 -1
Slovakia 16 21 5Czech Rep. 28 9 -19
Hungary 29 11 -18
Bulgaria 36 36 0
Poland 38 27 -11
Slovenia 40 17 -23
Latvia 47 34 -13
Lithuania 60 28 -32
Rumania 64 37 -27
BRIC‘s Generally better positions than in KOF Index
Asian giants move strongly upwards
Bigger countries corrected for country size
Distant trading partners
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Country NGI KOF Difference
China 42 63 21
Russia 46 48 2
India 52 68 16
Brazil 63 57 -6
Main issues and Possible Applications of the Index
Thank you for your attention!