Malaysia – KOF Globalization Index Top 28

(From ChatGPT) The globalization index is a measure used to assess the extent and impact of globalization on various countries. There are different methodologies and frameworks used to calculate this index, with some of the most recognized being the KOF Globalization Index, the DHL Global Connectedness Index, and the Ernst & Young (EY) Globalization Index. Here is an overview of how these indices are typically measured:

1. KOF Globalization Index

The KOF Globalization Index, developed by the Swiss Economic Institute, is one of the most widely used measures. It assesses three main dimensions of globalization:

  • Economic Globalization: This includes indicators such as trade flows, foreign direct investment (FDI), tariffs, and trade regulations.
  • Social Globalization: This dimension looks at international communication, cultural exchanges, information flows, and personal contacts. Indicators include international tourism, migration, and the internet usage rate.
  • Political Globalization: This measures the number of embassies in a country, membership in international organizations, participation in UN peacekeeping missions, and international treaties.

Each of these dimensions is further broken down into sub-dimensions and indicators. The data is normalized and aggregated into a single index score.

2. DHL Global Connectedness Index

The DHL Global Connectedness Index focuses on the depth and breadth of countries’ integration into the global economy. It includes:

  • Trade: Examines the flow of goods and services across borders.
  • Capital: Looks at foreign direct investment and portfolio equity flows.
  • Information: Measures international data flows, including internet bandwidth and international phone calls.
  • People: Assesses the movement of people across borders, such as migration, tourism, and international students.

The index considers both the size of these flows (depth) and the distribution across countries (breadth).

3. EY Globalization Index

The EY Globalization Index evaluates countries based on five key criteria:

  • Openness to Trade: Includes import and export levels as a percentage of GDP.
  • Capital Movements: Focuses on foreign direct investment, portfolio investment, and other capital flows.
  • Exchange of Technology and Ideas: Looks at patents, research and development expenditures, and internet usage.
  • Labor Movements: Assesses migration flows and the international mobility of labor.
  • Cultural Integration: Considers tourism, international students, and the prevalence of international brands and franchises.

General Methodology

The general methodology to calculate these indices involves several steps:

  1. Data Collection: Gathering relevant data from reliable sources such as international organizations, government reports, and databases.
  2. Normalization: Converting different indicators to a common scale to allow for comparison and aggregation.
  3. Weighting: Assigning weights to different indicators and dimensions based on their perceived importance in the context of globalization.
  4. Aggregation: Combining the weighted indicators into a single composite score.
  5. Validation and Adjustment: Reviewing the results for consistency and making any necessary adjustments to account for anomalies or outliers.

These indices provide a quantitative measure of how globalized a country is, reflecting various aspects of economic, social, and political integration into the global system. Each index has its unique methodology and emphasis, which can result in different rankings and interpretations of globalization levels.

The de facto index measures actual international flows while de jure measures policies and conditions that enable the former (Gopinath, C. (2023) Globalization – A Multidimensional System, 4th Ed., Edward Elgar Publishing, UK)

For details see https://kof.ethz.ch/en/news-and-events/media/press-releases/2022/12/globalisation-index.html

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