3.3a) How can you measure globalisation?

Question 1

1) Who produces the KOF?

Answer 1

1) The Swiss Economic Institute.

Question 2

1) What are the 3 interactions, used when calculating KOF?

Answer 2

1) Economic globalisation, social globalisation and political globalisation.

Question 3

1) What is economic globalisation?

Answer 3

1) Cross-border transactions and the volume of FDI.

Question 4

1) What is social globalisation?

Answer 4

1) Cross-border contacts and information flows. Also measures presence of McDonald’s and Ikea.

Question 5

1) What is political globalisation?

Answer 5

1) Number of foreign embassies, country’s membership of international organisations and participation in UN peacekeeping activities.

Question 6

1) Are indicators scaled, and which is the most important?

Answer 6

1) Yes, volume of FDI is the most important.

Question 7

1) How are these 3 sets of data then aggregated?

Answer 7

1) They are aggregated into one value for each of economic, social and political interactions, which are then ranked.

Question 8

1) Where are 13 of the top 15 countries?

Answer 8

1) Europe

Question 9

1) Why are the highest-ranked countries in Europe?

Answer 9

1) This is because the KOF Index measures international interactions, which are great in Europe, due to countries being small, in comparison to the US which has a large domestic economy. European countries have their own embassies, internet systems and investments.

Question 10

1) Who publishes the A T Kearney Index?

Answer 10

1) The ‘Carnegie Endowment for International Peace’.

Question 11

1) What are the four main indicators used to calculate its Index?

Answer 11

1) Political engagement, technological connectivity, personal contact and economic integration.

Question 12

1) What is political engagement?

Answer 12

1) A country’s participation in international treaties and organisations, as well as peacekeeping operations.

Question 13

1) What is technological connectivity?

Answer 13

1) Number of internet users, hosts and servers.

Question 14

1) What is personal contact?

Answer 14

1) Telephone calls, travel and remittance payments.

Question 15

1) What is economic integration?

Answer 15

1) Volumes of international trade and FDI.

Question 16

1) How is the A T Kearney Index different to the KOF Index?

Answer 16

1) The A T Kearney Index uses more holistic indicators such as the number of web servers, rather than internet communications, and also volumes of trade, as well as FDI.

Question 17

1) How is the overall ranking worked out?

Answer 17

1) Through a complex points and weighting system, for the four individual indicator rankings.