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The Variables in the Index

The names and definitions of the variables in the index, plus their average (i.e. mean) values, are given below:

Table 1

Sub-Index
Variable
Definition
Mean*

 

 

 

Economic Globalisation

Trade

Exports plus imports of goods and services as a proportion of GDP

83.29%

Foreign Direct Investment (FDI)

Inflows  plus outflows of foreign direct investment as a proportion of GDP

2.35%

Portfolio Investment

Inflows  plus outflows of portfolio investments as a proportion of GDP

3.22%

 

 

Income

Employee compensation paid to non-resident workers and  investment income from foreign assets owned by domestic residents  plus  employee compensation paid to resident workers working abroad and investment income from domestic assets owned by foreign  residents,  as a proportion of GDP.

 

 

9.12%

 

 

 

 

 

 

 

 

 

 

Social Globalisation

People

Foreign Stock

Stock of foreign population as proportion of total population.

6.65%

Foreign Flow

Inflows of foreign population as proportion of total population.

0.5%

Worker Remittances

Worker remittances (receipts) as a proportion of GDP.

3.11%

 

Tourists

Number of tourists (arrivals plus departures) as proportion of total population.

57.15%

Ideas

Phone calls

International  outgoing  telephone traffic (minutes) per capita

0.059

Internet users

Internet users as a percentage of  population

3.97%

Films

Number of films imported and exported.

310.92

Books and newspapers

Sum of value of  books and newspapers imported and exported per capita (US dollars)

10.08

Mail

Number of international letters delivered and sent  per capita

15.76

 

 

 

 

 

Political Globalisation

Embassies

Number of foreign  embassies  in country

34.16

 

UN Missions

Number of  UN peacekeeping operations in which country participates

1.16

Organisations

Number of memberships of International organisations

40.70

* Calculated over all countries/years

So, the economic globalisation index is constructed from four variables, the social globalisation index is constructed from nine variables (four included in the people globalisation sub-index, and five in the ideas globalisation sub-index), and the political globalisation index is constructed from three variables.

It is also clear from Table 1 that the mean or average values of the variables differ considerably, even across variables that are used to construct a given sub-index. To deal with this, we normalise the variables.