Transcript KOF vs Kearney summary sheets

A. T. Kearney Index
• Broken into 4 categories
–Economic Integration
–Personal Contact
–Technological
Connectivity
–Political Engagement
A.T. Kearney - Economic
• Trade & Foreign Direct Investment (FDI)
A. T. Kearney - Personal
• Telephone traffic
• Travel
• Remittances and Personal Transfers
A. T. Kearney - Technological
• Internet Users
• Internet Hosts
• Secures Servers
A. T. Kearney – Political
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International Organizations
U.N Peacekeeping
Treaties
Government Transfers
A. T Kearney – How is it
calculated?
• The lowest value is given a 0, the highest
is given a 1 and then relative values are
given to the ones in between.
• FDI, Internet and Telephone Traffic is
weighted double
• All scores are then summarized
A. T Kearney Advantages
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It covers 96% of worlds GDP
It covers 84% of worlds Population
Allows for comparison between countries
Allows for comparison over time
A. T Kearney - Disadvantages
• Only 64 Countries are included in the
index
• Weightings – who decides?
• How do you measure cultural trends?
A. T Kearney Criticisms
• 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.
A. T Kearney - Response
• Not statistically significant
The KOF Index
• Measures globalization on economic,
social and political dimensions.
• 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 subindices.
The 3 indices of the KOF Index
• 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
The 3 indices of the KOF Index
• 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%
The 3 indices of the KOF Index
• Political Globalization: The diffusion of
government policies.
• Sub-indices:
• Membership of international organizations
• Number of foreign embassies
• Participation in international treaties
Points of Note with KOF Index
• 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 of KOF
• The index allows comparing degree 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.
Examination Questions:
• Describe how one prominent index
measures global interaction.
• Explain how and why globalization may
be measured.
• Evaluate the effectiveness of this
measure in comparing the level of
globalization of different countries.