Measuring Globalization

21 Pages Posted: 17 Aug 2003

See all articles by Torben M. Andersen

Torben M. Andersen

University of Aarhus - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Tryggvi Thor Herbertsson

University of Reykjavik

Date Written: July 2003

Abstract

The multivariate technique of factor analysis is used to combine several indicators of economic integration and international transactions into a single measure or index of globalization. The index is an alternative to the simple measure of openness based on trade, and it produces a ranking of countries over time for 23 OECD countries. Ireland is ranked as the most globalized country during the 1990's, while the UK was at the top during the 1980's. Some of the most notable changes in the rankings are the decline of the US, Canada, and to a lesser extent Japan. Norway also receives a lower ranking. There are notable improvements in the ranking for Finland, Italy, Portugal, Spain and Sweden. For Portugal and Spain the changes seem to follow EU membership in the mid 1980's.

Keywords: Globalization Index, Factor Analysis, OECD

JEL Classification: F02, C82

Suggested Citation

Andersen, Torben M. and Herbertsson, Tryggvi Thor, Measuring Globalization (July 2003). IZA Discussion Paper No. 817. Available at SSRN: https://ssrn.com/abstract=434540

Torben M. Andersen (Contact Author)

University of Aarhus - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Tryggvi Thor Herbertsson

University of Reykjavik ( email )

Reykjavik
Iceland
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