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We introduce the revised version of the KOF Globalisation Index, a composite index measuring globalization for every country in the world along the economic, social and political dimension. The original index was introduced by Dreher (Applied Economics, 38(10):1091–1110, 2006) and updated in Dreher et al. (2008). This second revision of the index distinguishes between de facto and de jure measures along the different dimensions of globalization. We also disentangle trade and financial globalization within the economic dimension of globalization and use time-varying weighting of the variables. The new index is based on 43 instead of 23 variables in the previous version. Following Dreher (Applied Economics, 38(10):1091–1110, 2006), we use the new index to examine the effect of globalization on economic growth. The results suggest that de facto and de jure globalization influence economic growth differently. Future research should use the new KOF Globalisation Index to re-examine other important consequences of globalization and why globalization was proceeding rapidly in some countries, such as South Korea, but less so in others. The KOF Globalisation Index can be downloaded from http://www.kof.ethz.ch/globalisation/. ; ISSN:1559-744X ; ISSN:1559-7431

We introduce the revised version of the KOF Globalisation Index, a composite index measuring globalization for every country in the world along the economic, social and political dimension. The original index was introduced by Dreher (2006) and updated in Dreher et al. (2008). This second revision of the index distinguishes between de facto and de jure measures along the different dimensions of globalization. We also disentangle trade and financial globalization within the economic dimension of globalization and use time-varying weighting of the variables. The new index is based on 43 instead of 23 variables in the previous version. Following Dreher (2006), we use the new index to examine the effect of globalization on economic growth. The results suggest that de facto and de jure globalization influence economic growth differently. Future research should use the new KOF Globalisation Index to re-examine other important consequences of globalization and why globalization was proceeding rapidly in some countries, such as South Korea, but less so in others.

In this paper we present and describe the revised version of the KOF Globalisation Index, a composite index measuring globalisation for every country in the world along the economic, social and political dimension. The original index was introduced by Dreher (2006) and updated in Dreher et al. (2008). This second revision of the index introduces the differentiation between de facto and de jure measures along the different dimensions of globalisation, the differentiation between trade and financial globalisation within the economic dimension of globalisation and time-varying weighting of the variables entering the index. Finally, the revised version incorporates several additional variables in the construction process. At the aggregate level, we show that a bidirectional relationship between de facto and de jure globalisation exists.

Abstract. The present study proposes an alternative method to construct an index of globalization which is based on the principle of almost equi-marginal contributions (AEMC) or Shapley values of the constituent variables to the overall index rather than the correlation coefficients among the constituent variables and the overall index (the KOF index based on the principal component scores). This has been done by minimization of the Euclidean norm of the Shapley values of the constituent variables. As an exercise, secondary time series data (1970-2013) on the measures of globalization in three different dimensions (economic, social and political) of three economies (China, India and Pakistan) have been used. A comparison of the AEMC index with the KOF index reveals that while the former is more inclusive, the latter is more elitist in matters of inclusion of the weakly correlated constituent variables in the overall (composite) index. As a consequence, the AEMC index is more sensitive than the KOF index of globalization. Both indices capture the trends in globalization in the countries under study and are highly correlated between themselves. Thus, AEMC is an alternative or perhaps a better method to construct composite indices. Keywords. Globalization, KOF index, Equi-marginal, Shapley value, Global optimization, China, India, Pakistan.JEL. C43, C61, C71, F60, P52.

Every year several world organizations evaluate countries according different criteria and determine their indexes, such as KOF Index of Globalization, Corruption Perception Index, Global Competitiveness Index, Global Innovation Index, and others. These indexes later are used for analysis of the aspects of entrepreneurship activities in specific countries. One particular application of indexes is related to analysis and evaluation of the business environment of the country. The entrepreneurship is affected by many factors; to research all of them is very time and effort consuming process. The proposed approach (i.e., use of indexes) is targeted and can yield results of the practical significance. The goal of the current paper is to compare indicators of the Baltic countries with average indicators of the European Union by using selected indexes that characterize business environment. To reach this goal we set the following tasks: (1) to characterize theoretical framework of indexes that pertain to the business environment; (2) to perform comparative analysis of selected indicators of business environment of the Baltic countries and the EU according to 4 indexes; (3) to make conclusions about business environment in the Baltic countries, especially in Latvia, on the basis of indexes. The current study employs the logical-constructive method – comparison of theoretical notions with empirical data. The factor analysis allows identifying and comparing factors within chosen indexes. The benchmarking is used to estimate indicators of the Baltic countries and compare them mutually and with the average indicators of the EU – it allows to identify the best examples and calculate the deviation. The graphic method allows depicting information visually and making subsequent analysis.

Every year several world organizations evaluate countries according different criteria and determine their indexes, such as KOF Index of Globalization, Corruption Perception Index, Global Competitiveness Index, Global Innovation Index, and others. These indexes later are used for analysis of the aspects of entrepreneurship activities in specific countries. One particular application of indexes is related to analysis and evaluation of the business environment of the country. The entrepreneurship is affected by many factors; to research all of them is very time and effort consuming process. The proposed approach (i.e., use of indexes) is targeted and can yield results of the practical significance. The goal of the current paper is to compare indicators of the Baltic countries with average indicators of the European Union by using selected indexes that characterize business environment. To reach this goal we set the following tasks: (1) to characterize theoretical framework of indexes that pertain to the business environment; (2) to perform comparative analysis of selected indicators of business environment of the Baltic countries and the EU according to 4 indexes; (3) to make conclusions about business environment in the Baltic countries, especially in Latvia, on the basis of indexes. The current study employs the logical-constructive method – comparison of theoretical notions with empirical data. The factor analysis allows identifying and comparing factors within chosen indexes. The benchmarking is used to estimate indicators of the Baltic countries and compare them mutually and with the average indicators of the EU – it allows to identify the best examples and calculate the deviation. The graphic method allows depicting information visually and making subsequent analysis.DOI: http://dx.doi.org/10.5755/j01.eis.0.11.18645

This paper evaluates the effects of globalization on human development, gender development and human poverty in the developing countries and compares the effects across world regions as well as the income groups of countries. Applying the GLS random effect model to the annual panel data of 124 developing countries covering 9 years from 1997, the study shows that globalization, measured by the KOF Index of globalization, not only promotes human and gender development but also reduces human poverty significantly. Not surprisingly, all three aspects of globalization (economic, social and political) contribute to the overall effect of globalization. To complement these findings, the paper calls for a study of some country cases. The conclusion is made that such studies will facilitate the development of policy recommendations tailored towards countries in their cultural context, with a positive (or at least neutral) impact on the reduction of human development gaps within them.