KOF Index Research Articles

The relationship between economic growth, population, FDI, globalization, and CO2 emissions in OIC member countries

The concentration of CO2 emissions in OIC member countries has decreased over the past decade, the theory of sustainable growth reveals that an increase in the concentration of CO2 emissions can be influenced by various factors such as an increase in the economy, population, FDI, and globalization and vice versa. However, economic growth, population, FDI, and globalization in OIC member countries show an increase, so this fact seems to contradict the sustainable growth theory. Therefore, this study aims to test and analyse the effect of economic growth, population, FDI and globalization on the concentration of CO2 emissions in OIC member countries. This research is a quantitative research. The data analysed are data on economic growth, population, FDI, globalization index, economic globalization, political globalization, and social globalization for 53 OIC member countries in the period 1992 to 2020 obtained from various data sources such as the World Bank, UNTCAD, and KOF Index of Globalization. The data analysis technique used is the GMM system. The results of this study indicate that economic growth and FDI have a positive and significant effect on the concentration of CO2 emissions. While population and globalization show a negative influence on the concentration of CO2 emissions in OIC member countries.

Does Globalization Reduce Youth Unemployment? Augmented ARDL Approach

While unemployment is a significant issue that has been extensively discussed in economic literature for decades, it is one of the key indicators that governments and firms consider. In fact, reducing unemployment in a country contributes to both increasing social welfare and economic welfare. Fluctuations in unemployment figures during the globalization process have led researchers to prioritize this issue. The objective of this study is to ascertain the impact of globalization on youth unemployment in Türkiye over the period 1988–2021, utilizing the augmented ARDL approach. The KOF Globalization Index, a frequently utilized indicator in the literature, is selected to represent globalization. However, the study is limited by the fact that the most recent data from the KOF index belongs to 2021, and the data on youth unemployment began in 1988. The limited number of studies on the relationship between globalization and youth unemployment in Türkiye constitutes the starting point of this study. The findings of the study indicate that an increase in globalization in the long run decreases youth unemployment in Türkiye. Furthermore, economic growth, inflation, and foreign direct investments also decrease youth unemployment, while an increase in urbanization increases youth unemployment. In addition, if a deviation occurs in the short run, approximately 85% of these deviations disappear in the first period and converge towards the long-run equilibrium.

Critical analysis of Globalization’s Effect on Women’s Empowerment in Bangladesh

This study aims to investigate globalization's positive and negative effects on women’s empowerment in Bangladesh. The study uses the Global Gender Gap Index to measure women’s empowerment and the KOF index to measure globalization. Using quantitative analysis, the study demonstrates four Scatterplots to estimate the correlation between globalization and women’s empowerment in Bangladesh with data (2006-2020). The four Scatterplots show the positive relationship between globalization and women’s empowerment. However, Bangladesh is not free from the negative effects of globalization. While globalization has brought women into the marketplace, increasing their labor force participation, and affording them greater opportunities and choices, it has also made them vulnerable to fluctuations in the global marketplace.

Globalization and Income Inequality in Developing Economies: A Comprehensive Analysis

Around the world, people are becoming more and more worried about how globalization will affect their standard of living. According to the literature, globalization has resulted in the marginalization of the impoverished populations in developing economies and has exacerbated inequality, while the opposite may also be true. The objective of this study is to investigate the impact of globalization on income inequality. The study used two-stage least squares (2SLS) to study the influence of globalization on income inequality in 18 developing countries from 1991–2021. Utilizing the KOF index of globalization, it is determined that globalization, together with its three aspects, has a negative effect on income inequality among developing economies. Evidence demonstrates that the combination of trade openness and foreign direct investment (FDI) plays a significant role in reducing inequality among developing economies. We recommend developing economies actively support globalization in terms of trade and FDI in accordance with the findings. By expanding trade opportunities and opening up markets, globalization can benefit developing nations. This may result in a rise in FDI, the creation of jobs, and technological developments. Governments can contribute to raising the living standards of their inhabitants, lowering rates of poverty, and closing the income gap by promoting globalization. Although the study emphasizes the well-established link between globalization and income inequality, it focuses on the effects of various globalization dimensions, emphasizing the need to comprehend how different dimensions of globalization, namely economic, political, and social globalization affects inequality in developing economies.

Financial Globalisation and Total Factor Productivity Growth in Pakistan

The study aimed at examining the impact of financial globalisation and natural resource rents on Total Factor Productivity growth in Pakistan. The total factor productivity growth is computed by the growth accounting model assuming the Cobb-Douglas production Function, while the KOF index of globalisation is used to quantify financial globalisation. The series encompassed the time period from 1985 to 2019, and in order to get empirical results, an Autoregressive Lag Distributed Model is used. The empirical outcomes proved that financial globalisation positively impacts productivity. Hence, the propositions put forth by endogenous growth and new trade theories that globalisation has a central role in achieving productive growth are confirmed by the empirical findings of this study. On the other hand, the results indicated that rent-seeking behaviour concerning natural resources has a negative influence on total factor productivity growth in the long run demonstrating a natural resource curse exists for Pakistan’s economy. Based on its findings, the study recommended that promoting outward-oriented policies with a primary focus on financial integration is crucial for augmenting the overall productivity of domestic factors of production. Likewise, it is imperative to discourage rent-seeking behaviour from natural resources to increase the factor’s productivity.

The impact of globalization on domestic growth in Africa

Research into the impacts of globalization on domestic growth in Africa has been scarce and the results of the research that does exist have been mixed. This research addresses this gap in the literature by using the newly revised KOF Globalization Index to determine the impact of social, political, and financial globalization on African economies. The KOF Index was revised substantially in 2019. Our full data set includes 40 years of data, from 1980-2019. Findings indicate that the relationship between globalization and GDP is best represented by a non-linear cubic model. With that model, social globalization has become Africa’s most important predictor of GDP, particularly in the most recent ten-year period. Economic globalization was also a small, but significant, predictor. Implications for policymaking are also discussed.

Does globalization suppress social trust?

Globalization has been on the increase during the past 50 years, and there are now signs of a backlash. Part of the reason may be the widely held belief that globalization is harmful, not least for the cultural fabric. Is that the case? We investigate whether globalization has suppressed social trust, arguably one of the most beneficial characteristics of people in a society. By using a sample of first- and second-generation immigrants in 33 primarily European countries, we apply the epidemiological method to rule out reverse causality; and by using the KOF Index of Globalization, we study effects of economic, social and political globalization separately. We find that especially social globalization, and to some extent economic globalization, are positively related to social trust, with a small effect size, while political globalization is largely unrelated to it. Overall, this indicates that globalization does not pose a danger for social trust – at least not for people with a migration background. If anything, people seem to become slightly more trusting with more globalization.

ENTREPRENEURIAL ECOSYSTEM OF INTERNATIONAL BUSINESS IN THE TRANSITION ECONOMY: THE CASE OF SOUTHERN REGION OF UKRAINE

This paper aims to analyse and evaluate the state of the entrepreneurial ecosystem of international business in the transition economy based on the evidence of the southern region of Ukraine. The tasks of the study are (i) to identify the presence of components of the international business ecosystem and their quality depending on the level of development of the transition economy (policy, markets, finance, human capital, culture, support); (ii) to assess the current state of the components of the international business ecosystem; (iii) to identify constraining factors for the functioning of the regional entrepreneurial ecosystem for their further consideration when adjusting the trajectory of the development of the transition economy. The model of Isenberg was used to observe the structure of the ecosystem. The international ratings (KOF Index of Globalization, Global Competitiveness Index, Doing Business, etc.), the data of the State Statistics Service of Ukraine, national laws, etc. were used for the qualitative measurement of the ecosystem performance. An online survey was conducted to assess the current state of the ecosystem and to identify the restraining factors of its functioning. The research results demonstrate that all domains of an international business ecosystem are in the process of formation. 80% of respondents rated domains’ performance at three points on a 5-point scale, indicating poor functioning the ecosystem. The respondents of the survey represent several industries but mostly agro-industrial complex. The restraining factors are ineffective government policy; business-unfriendly legislation; limited access to the infrastructure; insecurity of property rights; inefficient business support systems, etc. The research results show that almost all components of the ecosystem are less efficient in Ukraine than in Europe, except for the entrepreneurs’ intentions of networking and collaboration development. The paper proposed original research on the institutional context of the ecosystem in the transition economy. The study is built on the idea of the specific regional peculiarities of entrepreneurial ecosystems and the impact of transformational processes of the economy of the country. The results of the study can be used as a basis for a scientific focus on the policy of improving the entrepreneurial ecosystem. The article empirically expands the knowledge of entrepreneurial ecosystems and shows the potential and benefits of a complete integrated ecosystem for overall regional development.

Globalization Processes in Sub-Saharan African Countries – A Case Study of Kenya and Tanzania

The aims of this article are: (1) presentation of changes in the level of globalization in Kenya and Tanzania (2) comparison of countries in terms of globalization level (3) identification of the main globalization processes taking place in the countries. To ensure economic development in Tanzania and Kenya, it is necessary to implement globalization processes and monitor the level of globalization. For this purpose, statistical data analysis and comparative analysis using the KOF Index have been employed. Progressing globalization was found in Kenya and Tanzania, and based on this, it was decided to make a thorough analysis of which aspects have increased the most. For this purpose, the KOF Index of Globalisation analysis was used for these countries and on this basis the strongest development areas in the last 22 years were identified, as well as a comparative analysis of globalization in Kenya and Tanzania was made. The studies have shown that the level of globalization is increasing in both Kenya and Tanzania, with Kenya exhibiting a higher level. This difference might primarily stem from the economic policy orientation – Kenya focuses on trade openness, whereas Tanzania emphasizes support for domestic sectors of the economy and local entrepreneurs. The areas in which countries have developed the most are social processes. The ongoing processes of globalization can support both the growth and economic development of the analyzed countries, thereby potentially help reduce the main social and economic challenges in Kenya and Tanzania.

Is the EKC hypothesis valid in the five highly globalized countries of the European Union? An empirical investigation with smooth structural shifts.

This study analyzes the impact of globalization and income on ecological footprint over the period of 1970 to 2018 in the five highly globalized countries of the European Union ranked by the KOF index. To this end, the study uses a Fourier autoregressive distributed lag cointegration and Fourier Toda-Yamamoto causality methods. Studies that examine the effects of globalization on environmental degradation often neglect structural changes, which can lead to biased results. Using Fourier approximations, this study is the first to conduct an environmental assessment incorporating smooth structural changes for the five highly globalized countries of the European Union. The results show that (i) cointegration exists in Switzerland, Sweden, the Netherlands, Austria, and Denmark. (ii) The EKC hypothesis is valid for Switzerland and Denmark, while in Sweden and Austria, there is a U-shaped relationship between income and ecological footprint. (iii) The turning point at which income improves environmental quality is $68,191 for Switzerland and $46,600 for Denmark, and both countries have exceeded this per capita income level. (iv) Globalization is a factor that promotes environmental sustainability in Switzerland and the Netherlands. In order to regulate and manage environmental issues effectively, policy-makers should take advantage of economic development in Switzerland and Denmark as well as globalization in the Netherlands and Switzerland.

The Impact of Energy Innovations and Environmental Performance on the Sustainable Development of the EU Countries in a Globalized Digital Economy

The research conducted in this paper aims to examine the role of energy innovations, digital technological transformation, and environmental performance in enhancing the sustainable economic development of the European Union (EU) countries, widely shaped by the globalization process. An advanced empirical analysis is configured on a cross-sectional dataset of EU-27 Member States compiled at the level of 2018 based on several modern econometric procedures, namely robust regression, structural equation modelling (SEM) and network analysis through Gaussian graphical models (GGM). We apply the econometric procedures to firstly identify and assess the direct, indirect, and total interlinkages between all considered variables, as well as their further cumulated spillover impact on sustainable economic development. EU countries are afterward clustered according to the Ward method inset on hierarchical clustering for an in-depth assessment and tailored policy design by accounting for the level of financial and trade globalization (captured through the KOF Index of Globalization), environmental performance and sustainability (captured through the Environmental Performance Index—EPI), and the degree of integration of digital technologies (proxied through the Digital Economy and Society Index—DESI). Main results highlight that there are significant beneficial effects induced by energy innovations, increased environmental performance and digital transformation on the sustainable development of EU countries, with notable differentiation among them. Policy guidelines and strategic directions are also enhanced and largely presented within the paper.

RELATIONSHIP BETWEEN GLOBALIZATION AND POVERTY IN PAKISTAN: ROLE OF INSTITUTIONS

This paper aims to investigate the role of institutions in the long-term relationship between globalization and poverty. The autoregressive distributed lag (ARDL) model of co-integration is employed to estimate the long-run equilibrium relationship in the context of Pakistan over annual time series data spanning from 1984 to 2015. The KOF index is used to measure globalization, and the weighted average of five variables— democratic accountability, government stability, law and order, corruption control, and bureaucratic quality—is used to assess institutional quality. Our results demonstrate that the impact of globalization on reducing poverty would increase in the presence of high-quality institutions. However, the size effect of institutional quality is not large enough to reap the full benefits of globalization in mitigating poverty in the country. Other control variables in the model reveal that unemployment and government spending increase poverty, whereas GDP growth is found to reduce it. Keywords: Globalization; KOF Index; Poverty; Institutional quality; ARDL; Pakistan. JEL: F6; I3; D73; C5

Forest Area: Old and New Factors That Affect Its Dynamics

The analysis of the nexus between environmental degradation and economic progress has focused on polluting emissions. However, the forest area plays a significant role in achieving the Sustainable Development Goals (SDG) related to the environment. Forest area is directly related to air and water quality and the absorption of polluting residues. At the same time, in recent decades, economic progress processes have been internationalised and knowledge has improved in the context of persistent income inequality. The objective of this research is evidence that economic progress is destroying nature; for this, we use forest area as a measure of environmental quality. The nexus between the two variables is moderated by the globalisation KOF index, income inequality, and knowledge. Using non-linear methods, we find a threshold effect in globalisation, inequality, and economic progress. This result implies that before the threshold, the impact of the covariates differs from the impact after the threshold, generating findings different from those shown by the previous environmental literature. The results reveal that after a threshold, the impact of economic progress on forest area is negative. This fact reveals that the main obstacle to achieving environmental sustainability is in the least developed countries, where inequality and globalisation reinforce the degradation of the forest area. We find that knowledge is a mechanism to prevent deforestation, particularly in more developed countries. Those responsible for pro-environmental policy should promote global strategies to prevent economic progress from being based on the destruction of nature.

The Issues of the Improvement of the Methodology for the Assessment of Reforms

The purpose of this article is to suggest a new methodology that will give us an opportunity to create an Integral Index of Reforms (IIR) that will include seven indexes: KOF Index of Globalization, The Democracy Index, The Corruption Perception, The Human Development, Doing Business, The Global Competitiveness Index and The Index of Economic Freedom. From both scientific and empiric perspective it is supposed that the quantitive assessment of various reforms implemented in different countries based on presented indicators of seven indexes despite the new methodology that we suggest give us the opportunity to include much more indexes.

Do renewable, non-renewable energy, carbon emission and KOF globalization influencing economic growth? Evidence from BRICS’ countries

This study explores the possible effect on economic growth of renewable and non-renewable energy consumption and the disaggregated KOF index on the BRICS economies among 1990–2018. For this purpose, the Dynamic Panel Generalized Method of Moment (GMM) was applied. The findings indicate the increase among the interaction of economic and social globalization (de facto measure) and decrease effect (de jure) on Economic growth, while, the interaction of social and political globalization decrease the Economic growth, considering de facto measure for the both of that indexes. In addition, it was also observed that the increase in emissions positively affects economic growth, as well as the consumption of non-renewable energy; on the other hand, it was observed that the consumption of renewable energies tends to reduce economic growth. On the globalization effect, the findings indicate the increase among the interaction of economic and social globalization (de facto measure) and decrease effect (de jure) on Economic growth, while, the interaction of social and political globalization decrease the Economic growth, considering de facto measure for the both of that measures.

Вплив глобалізаційних процесів на національну економіку України

The article studies the impact of globalization on the process of activities of domestic enterprises, which are forced to change their behavior strategies in the markets of goods and services and adapt to new conditions of doing business. The main causes of globalization are determined, its positive and negative consequences for the national economy are listed. The processes of globalization taking place today have directly affected Ukraine. Based on the carried out research of these, the article provides the main causes, advantages and disadvantages of global phenomena, as well as forecasts for the future development and impact of globalization on the national economy. It is indicated that globalization has a significant impact on the development and functioning of the country’s economy. Also, the processes of globalization have a fairly wide impact on the development of domestic enterprises. The KOF index of the level of globalization of the world countries, which prevails in the most cases, is considered. The rating of Ukraine according to the KOF index of the level of globalization, the dynamics of changes in the index for 2010-2019 are provided. The positive aspects and threats caused by Ukraine’s entry into the world global space are identified. It is determined that in the context of globalization, Ukrainian enterprises are trying to achieve their growth through the modernization of production facilities, introduction of modern technologies, ensuring world-class productivity and quality of products and services, improving management, active public-private partnership. There are four main development options that provide an opportunity to achieve success and increase the efficiency of enterprises in the context of globalization. It is summed up that, despite all the negative aspects, globalization increases the efficiency of the world economy, helps enterprises to achieve significant success through the opening-up opportunities, and unites countries to solve global economic problems.

Globalization and Its Impact on Women’s Empowerment in Bangladesh

This research aims to investigate the impact of globalization on women’s empowerment in Bangladesh. Like many other countries, Bangladesh also integrated with the rest of the world through globalization. Empirical studies on the impact of globalization on women’s empowerment in Bangladesh circumstances are rare. Many studies to date have adjudicated to review the positive and negative effects of globalization on women. The study highlights the impact of globalization on women’s empowerment in Bangladesh in three ways. Firstly, the study draws application to traverse the testimony of women's empowerment by examining the initiatives (National Women Development Policy) taken by the government to levitate the status of women in society through their participation in economic and social activities and discusses the limitations and pivotal suggestions for the policy. Secondly, the study explains the positive and negative effects of globalization on women’s lives in Bangladesh. And finally, for the quantitative analysis, the study shows different scatter plots to establish the relationship between globalization and women empowerment as the KOF Index and the GGG Index, and the SIGI Index using time series data for the period of (2007-2017).

An Empirical Investigation of Global Production Networks in Indian Manufacturing Sector

This article attempts to dive into the operation of global production networks in India with manufacturing sector in the primary scope of focus. It aims to analyse the long-run and short-run relationship among the factors which form a global supply chain and their effects on a supply chain, using yearly data from 1984 to 2017. Our primary results from the estimations show that all the factors incorporated into the study are important for initiation and effective execution of a supply chain. The autoregressive distributed lag model shows that Index of Industrial Production (IIP), export–import ratio, KOF index and electricity index affect a supply chain positively whereas USD–INR exchange rate and unemployment rate affect gross value added negatively. The error correction model shows long-run relationship between IIP and export–import ratio. The study also highlights the importance of trade balance and industrial production in the long run.

Competitiveness of the Southeast European Countries in the Conditions of the Globalization

Abstract Globalization is a process often identified with the economic integration of countries, the creation of a single market while neglecting other aspects of globalization. Besides its economic dimension, The KOF index of globalization includes the social and political dimensions. One of the questions is how the countries manage to strengthen their competitive position in the international market in the age of globalization. Is it challenging to maintain a stable competitive position in the conditions of greater connection of countries and in what form? For this reason, the paper deals with the change of the Global Competitiveness Index, a renowned measure of the competitiveness of national economies according to the methodology of the World Economic Forum, under the influence of increased economic globalization of Southeast European countries. It also estimates the impact of globalization, or its economic, social and political dimension on the economic growth of Southeast European countries, which is one of the requirements for successful positioning on the international economic scene.

Revisited Globalization's Impact on Total Environment: Evidence Based on Overall Environmental Performance Index.

This study aims to examine the impact of globalization on environmental performance by employing panel data for 148 countries from 2001 to 2018, via the indicator of Environmental Performance Index to capture the overall environmental quality and KOF index to measure the multi dimensions of globalization. The empirical results suggest that globalization is critical to environmental performance, which is reliable while we conduct several robustness tests. Furthermore, if globalization increases, it would be beneficial for the environmental performance; moreover, among specific dimensions of globalization, economic globalization, social globalization and political globalization would bring about better environmental performance. Besides, the improvement of globalization, social globalization and political globalization would bring about better environmental performance, while that of economic globalization cannot change the overall environmental performance. Our study offers more insight into the relationship between globalization and environmental performance.