Comparing KOF

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Comparing KOF Kearney

• LEARNING OBJECTIVES
• To identify the strengths and weaknesses of the
  KOF and Kearney index
• To evaluate which is the best index for showing
  Globalization

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A. T. Kearney Index

• Broken into 4 categories
• Economic Integration
• Personal Contact
• Technological Connectivity
• Political Engagement

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A.T. Kearney - Economic

• Trade Foreign Direct Investment (FDI)

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A. T. Kearney - Personal

• Telephone traffic
• Travel
• Remittances and Personal Transfers

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A. T. Kearney - Technological

• Internet Users
• Internet Hosts
• Secures Servers

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A. T. Kearney Political

• International Organizations
• U.N Peacekeeping
• Treaties
• Government Transfers

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A. T Kearney How is it calculated?

• The lowest value is given a 0, the highest is
  given a 1 and then relative values are given to
  the ones in between.
• FDI, Internet and Telephone Traffic is weighted
  double
• All scores are then summarized

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A. T Kearney Advantages

• It covers 96 of worlds GDP
• It covers 84 of worlds Population
• Allows for comparison between countries
• Allows for comparison over time

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A. T Kearney - Disadvantages

• Only 64 Countries are included in the index
• Weightings who decides?
• How do you measure cultural trends?

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A. T Kearney Criticisms

• Smaller countries tend to take the top places in
  the index due to higher proportion/importance of
  FDI therefore suggesting an over importance of
  the size of the country.

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A. T Kearney - Response

• Not statistically significant

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Points of Note with KOF Index

• The KOF Index of 2009 shows that globalization is
  still on the rise, driven by increased economic
  and political globalization, while social
  globalization stagnates.
• According to the KOF Index of Globalization 2009,
  Belgium is the world's most globalised country,
  although it is not on the top of any of the three
  dimensions

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Advantages of KOF

• The index allows comparing degree and changes in
  globalization over a large number of countries
  and more than 30 years.
• The KOF Index of Globalization 2009 is available
  for 158 countries over the period 19702006,
• It is calculated on the basis of 24 variables.

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Advantages of KOF Index

• employing the weighted individual data series
  instead of using the aggregated lower-level
  globalization indices data can enter the higher
  levels of the index even if the value of a
  sub-index is not reported due to missing data

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Disadvantages of KOF

• the results were sometimes driven by extreme
  outlying observations and missing values.
• cultural globalization mostly refers to the
  domination of U.S. cultural products. Arguably,
  the United States is the trend-setter in much of
  the global socio-cultural realm