(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
i. Number of international tourist arrivals from worldwide.
ii. Number of air transport carrier departures worldwide.
iii. Number of Internet users
Index of political globalization
Not all of the data are available for the target year; several drivers under index of political globalization
were extrapolated from the older data. Since year to year changes tend to be small in those drivers we
don’t expect this to have a large impact on the results. Therefore, in this paper, to measure the level of
political globalization, drivers used are number of embassies in country, membership in international
organizations and participation in U.N Security Council Mission (Dreher, 2006).
In order to calculate index of globalization, each variable has been transformed to index on zero to 100
scales (Dreher, 2005; Marten, 2009; and Martens & Zywietz, 2006). Index of 100 shows the maximum
value for a specific variable for the period of 1970-2011 and denotes more globalization, while index of
zero shows minimum value of index. All drivers except total trade Japan as a sum of import and export
of goods and services in Malaysia (percent of GDP) and total trade US as a sum of import and export of
goods and services in Malaysia (percent of GDP), are assumed when higher value of the variable
indicated higher globalization. The formula that has been used for transformation is;
For the variable of total trade Japan as a sum of import and export of goods and services in Malaysia
(percent of GDP) and total trade US as a sum of import and export of goods and services in Malaysia
(percent of GDP), higher value of the variable indicates lover level of globalization, so the formula for
transformation is;
The weights for calculating index of globalization are in a way that Index of economic globalization has
weight of 35%, index of social globalization has weight of 37% and index of political globalization has
weight of 28% (Dreher, 2005, Martens, 2009; Martens & Zywietz, 2006). Indexes consist of sub indexes,
and sum of weights of each sub index is 100. Regardless of weighting method used, weights are
essential value judgments. For maximum transparency, we relied on equal weighting on sub drivers
(Martens 2009). Weights multiply with transformed value of indexes that value from to zero to 100
scales in order to get overall globalization index. Table 1 shows the drivers included in calculation and
weights for each drivers, each sub index and index.