KOF index

Question 1

what does it measure

Answer 1

level of globalisation in a country

Question 2

how the index is worked out and scored

Answer 2

-economic globalisation = cross border transactions and volume of FDI
- social = cross border contacts (e.g. calls, tourists) and presence of mcdonalds and ikea
- political = amount of foreing embassies, membership in different international organisations, and participation in UN peacekeeping activities

each indicator weighted on score from 0-100

Question 3

trends on top ranking countries

Answer 3

-mainly european
-no USA or China as rely mainly on internal connections
-small countries as they rely more on outside sources for trade and goods/services than large countries who can provide themselves

Question 4

advantages

Answer 4

• allows us to compare degree and changes in globalisation for large number of countries for more than 30 years
• 24 variables considered (social, economic, political, cultural globalisation) whilst choosing elements which are more significant so reflected more (economic)

-in case of missing data, countries still able to enter higher levels of index as this is weighted individual data ensures more significant measures are included like FDI

Question 5

disadvantages

Answer 5

• hard to calculate true number of internet users
• some places have many domestic tourists but not international e.g. large countries with ethnically and culturally diverse places but this not recognised

-measures like international letters are very dated as most use email

-some countries are small and dont have many embassies and instead rely on neighbouring countries embassies e.g. Monaco

-some countries remain neutral and dont join international orgs.

• ## anything related to trade = hard to measure as many don’t know true size of informal economy