Measuring Global Interactions:

Indices of globalization:

Kearney Index
● 4 key components
○ Political engagement - including foreign aid, treaties, organizations and
peacekeeping
○ Technological connectivity - including number of internet users, hosts, and secure
servers
○ Personal context- including telephone calls, travel and remittances
○ economic integration - including international trade and foreign direct investment
● One characteristic that ,any of the most globalized countries have in common is size.
Canada and United States are the only from the top 10 globalized countries that have large
areas.
● Countries such as singapore and netherlands lack natural resources. Countries like
denmark and ireland have limited domestic markets. To be globally competitive, these
countries have no choice but to open up and attract foreign investments.
● How to calculate:
○ This components are then normalized through a process that assigns 1 to the
highest data and all of the valued data points are fractions of one
○ FDI, internet and Telephone traffic is weighted 2
○ all scores are summed and summarized

Advantages Disadvantages

- 96% of world's GDP - only 64 countries

- 84% of world's Pop. - who decides the weightings?
- comparison between countries - cultural trends are not measured
- comparision over time
● Criticism: Smaller countries tend to take the top places in the index due to higher
proportion/importance of FDI – therefore suggesting an over importance of the size of the
country.

KOF Index
● Measures globalization on economic, social and political dimensions.
● How is it calculated?
○ On a scale of 1-100.
○ Higher values denote greater globalization
● Variations in data are prevented from impacting the overall value by using principal
components analysis to determine the weighting of the sub- indices.
● 3 indicatos:
○ Economic Globalization: long distance flow of goods, capital and services and
information. • Subdivided into: 1. Actual flows (eg: FDI and trade as a % of GDP) 2.
Restrictions: eg: tariffs and trade barriers) • 37% weighting
○ Social Globalization: expressed as the spread of ideas, images and people. • 3
sub-indices are: • personal contact (eg international telephone call and tourism) •
 Information flows (eg internet users per 1000 people and trade in newspapers as a
% of GDP) • Cultural Proximity (eg number of McD’s) • Weighting: 39%
○ Political Globalization: The diffusion of government policies. • Sub-indices: •
Membership of international organizations • Number of foreign embassies •
Participation in international treaties
● The KOF Index of 2009 shows that globalization is still on the rise, driven by increased
economic and political globalization, while social globalization stagnates.
● According to the KOF Index of Globalization 2009, Belgium is the world's most globalised
country, although it is not on the top of any of the three dimensions

Advantages Disadvantages

- The index allows comparing degree - Cultural globalization mostly refers to

and changes in globalization over a
large number of countries and more
than 30 years.
- The KOF Index of Globalization 2009 is
available for 158 countries over the
period 1970–2006,
- It is calculated on the basis of 24
variables.
- Missing data is corrected for by using
weighting.
the domination of Western cultural
products and only a few countries have
a chance to “compete.”
- Data might be dated.
- Variables might be dated or bias
(letters, newspapers, McDonalds).
- True trade is very difficult to measure.
- Some countries choose not to take part
in international organizations but
doesn’t mean they are any less
globalized (Switzerland).
- Illegal foreign immigrants are not
counted