(icmef 2012) proceeding developing standardized economic drivers f

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INTERNATIONAL CONFERENCE ON MANAGEMENT, ECONOMICS
AND FINANCE (ICMEF 2012) PROCEEDING
15 th - 16 th OCTOBER 2012. HILTON HOTEL, KUCHING, SARAWAK, MALAYSIA
ISBN: 978-967-5705-09-0. WEBSITE: w w w . g l o b a l r e s e a r c h . c o m . m y
5. DISCUSSION AND CONCLUSIONS
Result of analysis and calculation of Globalization in Malaysia show that in the period from 1990-2010,
Globalization index had consistent growth and its value increased from year to year due to increase in
trade volume. If we compare index of globalization between 1990s and first decade of 21 century,
Malaysia’s economy is more globalized in the first decade of 21 century where the biggest influence on
globalization index was trade volume. Malaysia further globalized its economy by signing new free trade
agreements. As the 24th largest trading nation in the world, strengthening trade and economic
relations with as many countries as possible is essential to Malaysia.
In our view, quantitative assessment of globalization is a complex matter since there is no generally
accepted valuation methodology. Attempting to measure a country’s level of globalization, different set
of drivers and its different methodologies are used in calculating of globalization index. The use of
various assessment methodologies generates different results. In choosing the drives, its status must be
the most integrated drivers in globalization process in that country. In the case of Malaysia, we use total
trade with Japan and US as a new economic driver to measure the level of globalization due to influence
on international trade. If the volume of trade with these two countries increases from year to year, it is
still not showing that Malaysia economy is globalized. It is because increase in volume of trade with the
same country does not reflect globalization of economy. Globalization is a situation of having more
connection or relations with many countries especially in trade. The less volume of trade with these two
countries shows that we have more trading partner and economy is more globalized. The best drivers to
describe the situation in Malaysia are total trade Japan as a sum of import and export of goods and
services in Malaysia (percent of GDP), total trade USA as a sum of import and export of goods and
services in Malaysia (percent of GDP), total number of foreign companies in Malaysia and total Foreign
assets in Malaysia (percent of GDP).
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