DHL Global Connectedness Index 2014

60 4. The Breadth of Global Connectedness
Figure 4.1. Breadth, Concentration, Distance,
and % Intra-regional, Changes versus 2005 Baseline 1
108%
106%
104%
102%
100%
98%
96%
94%
Figure 4.2 Growing and Shifting Interactions,
Advanced vs. Emerging Economies, 2005 – 2013
(or most recent available year) 3
Absolute Growth
160%
140%
120%
100%
80%
60%
92%
2005 2006 2007 2008 2009 2010 2011 2012 2013
40%
20%
Breadth
Distance
Concentration
% Intra-regional
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
The breadth of global connectedness has declined every year since 2005
except for an uptick in 2009. International interactions have also stretched
out over greater distances, become less regionalized, and spread out more
evenly across partners (become less concentrated) over the same period.
From Advanced to Advanced
From Emerging to Advanced
Shifting Shares
100%
90%
80%
From Advanced to Emerging
From Emerging to Emerging
The breadth of the world’s global connectedness has
declined every year since it was first measured in 2005,
except for a single uptick during the financial crisis in
2009, as shown on Figure 4.1. Declining breadth implies
that the distributions of countries’ international interactions
and the global distributions of the same interactions
have diverged over time. Relative to a growing globe with a
shifting center of economic mass, the breadth of countries’
international interactions has become less global. 1
The other measures shown on Figure 4.1, however, all point
to countries’ international interactions becoming more
rather than less spread out. These measures differ from
breadth in that they measure absolute levels of globalization
whereas breadth measures globalization relative to a
benchmark that shifts with countries’ evolving international
opportunities. These other measures complement the
breadth results.
Concentration tracks whether countries’ international
interactions are narrowly focused among a few partners or
are spread out evenly across them. It is calculated using a
concentration measure that ranges from a maximum of 1 if
all of a country’s interactions are concentrated with a single
partner and approaches zero as they are spread out more
evenly across partners. 2 Concentration declined between
2005 and 2007, but that decline has since been partially
reversed. The relationship between breadth trends and concentration
trends will be examined later in this chapter.
Distance and intra-regional share are both geographic
indicators of (absolute) globalization. The former simply
70%
60%
50%
40%
30%
20%
10%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
From Advanced to Advanced
From Emerging to Advanced
From Advanced to Emerging
From Emerging to Emerging
The rising participation of emerging economies in international interactions
is reshaping global connectedness. In 2005, over half of international interactions
took place between advanced economies, but now the majority
involve an emerging economy on one or both sides of the interaction.
reflects the weighted average distance traversed by all the
international interactions covered by the breadth components
of the index. Intra-regional share, aggregated in the
same way, measures the percentage of interactions that take
place within the seven regions listed in Appendix B. Figure
4.1 indicates that international flows and stocks bridged
greater distances in 2013 than in 2005, and a smaller proportion
of them took place within regions.
These shifts are closely related to the rise of emerging
economies as major participants in the interactions tracked
on the DHL Global Connectedness Index. Figure 4.2 summarizes
how the rise of emerging economies has expanded
international interactions in absolute terms and shifted
them in relative terms toward emerging economies. Across
all of the breadth components of the index (aggregated