Abstract
This paper measures the globalization degree of physical trade flows based on WTO figures from 2003 to 2014. The paper is an annual update of former presented papers representing a long-term study analyzing the evolution of the globalization phenomenon. The entropy-based metrics used to compute the interweavement of trade flows is based on a Boltzmann derived concept of entropy, i.e., the higher the order (high inequality) the lower the entropy, leading to a new defined statistical entropy. Translated to economy: the higher the inequality (high concentration of flows) the lower the entropy, i.e., the lower the globalization degree resulting in a higher risk of the economic system. Former papers have shown that economic world trade, as a whole, has been globalizing during recent years but with different patterns: de-globalizing for advanced economic regions, such as North America and Europe, and globalizing for emerging economic regions. Furthermore, it shows that globalization or de-globalization, intended as interweavement of flows, is not a result of the absolute trade volume but of the growth rate of trade volume. The Globalization Trade Model with globalization type 1a of commodities, globalization type 1b of specialties, and opportunistic low-cost globalization type 1c gives an explanation for the different regional evolutions. At the beginning of economic development, globalization is governed by the H-O resource endowment trade logic complying with complementary needs of economic regions, spreading trade flows to new destinations, whereas advanced economies are concentrating on preferential destinations, following Linder’s trade model based on similar consumption patterns. However, after the financial crisis of 2008, during the last years, the evolution of world trade has been stagnating. Is the globalization of trade coming to an end? The aggregated result seems to confirm inverse Kuznets evolution of globalization, explainable with the Central Theorem of Globalization and the Maximizing-Value-Net-of-Risk globalization logic.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Battiston S et al (2006) Effects of globalization in a model of production networks embedded in geographical space. ETH working paper
Caselli M (2006) On the nature of globalization and its measurement, UNU-CRIS occasional papers. Università Cattolica del Sacro Cuore, Milano, O-2006/3
Dreher A (2006) Does globalization affect growth? evidence from a new index of globalization. Appl Econ 38(10):1091–1110
Dreher A et al (2010) Measuring globalization—opening the black box. a critical analysis of globalization indices. J Globalization Stud 1(1)
Fagiolo G (2012) The international trade network: statistical properties and modeling. In: Latsis Symposium, ETH Zurich, Zurich
Gabrielli A (2012) Clustering and ranking countries and their products: a network analysis. ECT-Conference, Trento
Gallegati M et al (2008) The asymmetric effect of diffusion processes: risk sharing and contagion. Glob Econ J 8(3)
Ghemawat P, Altman S (2013) Depth index of globalization—and the big shift to emerging economies. Pankaj Ghemawat/IESE Report
Karunaratne N (2012) The globalization-deglobalization policy conundrum. Mod Econ 3:373–383
Maurer A, Degain C (2010) Globalization and trade flows: what you see is not what you get. WTO working paper
Pietronero L et al (2013) New metrics for economic complexity: measuring the intangible growth potential of countries. Conference at Institute for New Economic Thinking, Hong Kong
Ruettimann B (2009) Modelling economic globalization—the basic globalization types. In: Global studies association conference, Royal Holloway University, London
Ruettimann B (2011a) A comprehensive globalization model to analyze industry logics: the seven economic globalization types, ICOAE 2011, Perugia
Ruettimann B (2011b) An entropy-based inequality risk metric to measure economic globalization, 1st Conference on Spatial Statistics, University of Twente, Nederland, Elsevier. Proc Environ Sci 3:38–43
Ruettimann B (2012) Measuring spatial extension of economic globalization, ICOAE 2011, University of Perugia, Italy. J Euro Econ 11(7):509–517
Rüttimann B (2007) Modeling economic globalization—a post-neoclassic view on foreign trade and competition. edited by MV-Wissenschaft, Münster, ISBN 978-3-86582-447-9
Rüttimann B (2008a) Which globalization for the aluminium industry—a normative analysis exploring alternative business models. ALUMINIUM 1/2 and 3 2008, Giesel Verlag
Rüttimann B (2008b) Which globalization for the aluminium industry. In: Proceedings of the ALUMINIUM 2008 Congress in Essen, organised by DGM, German Metallurgical Association, 23–25 September 2008
Rüttimann B (2010a) Measuring economic globalization: entropy-based inequality risk metric, Europa regionum, TOM XIII, ROK 2010. University of Stettin, Poland, pp 7–23
Rüttimann B (2010b) Globalisierung verstehen heisst Märkte beherrschen—Wie man durch analyse der Geschäfts- und Industrielogik ein normatives Modell der Globalisierungsformen erhält. iO new Management 5/2010. Springer
Rüttimann B (2011c) Werden die chinesischen Halbzeugexporte die Märkte überfluten?, DOW JONES NE Metalle Monitor, Nr.1/2011, Dow Jones News
Rüttimann B (2013) World trade and associated systems risk of global inequality: empiric study of globalization evolution between 2003–2011 and regional pattern analysis, ICOAE 2013, Istanbul, Turkey, proceedings published by Elsevier. Proc Econ Finance 5:647–656
Rüttimann B (2014a) World trade logics and measure of global inequality: regional pattern and globalization evolution between 2003–2012. Open J Appl Sci 4(4):184–196
Rüttimann B (2014b) Modeling financial type 2b globalization and its repercussion on the real economy. Paper presented at ICOAE 2014, Chania, 3–5 July 2014
Rüttimann B (2015) Measuring the globalization degree of trade from 2003–2013: is globalization of economy coming to an end? ATINER’s conference paper series, FIN2015-1540
Rüttimann B (2016) Modeling financial type 2b globalization and its effects on trade, investments, and unemployment. Int J. Comput Econ Econ 6(2)
Stiglitz J (2004) Capital-market liberalization, globalization, and the IMF. Econ Pol 20(1)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Appendix
Rights and permissions
Copyright information
© 2017 Springer International Publishing AG
About this paper
Cite this paper
Rüttimann, B.G. (2017). Evolution of Trade Globalization from 2003 to 2014: Weakening Dynamics of World Trade Confirms Globalization Postulates. In: Tsounis, N., Vlachvei, A. (eds) Advances in Applied Economic Research. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-48454-9_31
Download citation
DOI: https://doi.org/10.1007/978-3-319-48454-9_31
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-48453-2
Online ISBN: 978-3-319-48454-9
eBook Packages: Economics and FinanceEconomics and Finance (R0)