Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203429
Authors: 
Huh, Hyeon-Seung
Park, Cyn-Young
Year of Publication: 
2019
Series/Report no.: 
ADB Economics Working Paper Series 587
Abstract: 
The purpose of this study is twofold. The first is to develop a new composite index of globalization based on data on 158 economies over the period 2006−2014. The second intention is to use the new index to evaluate empirically the possible effects of globalization on economic growth and income inequality. The index comprises 25 indicators that represent the key socioeconomic components of global integration. Principal component analysis is used to weight each component and construct an aggregate measure. Unlike previous composite indexes, this study separates the contributions of intraregional and extraregional integration in the construction of the globalization index. The results show that although globalization promotes economic growth, it may worsen income inequality. Highincome countries benefit most in that the positive effect of globalization on economic growth is strongest among them than on other income groups, and they experience a less pronounced widening of income inequality. Between the two drivers of global economic integration, intraregional integration is far more important than extraregional integration. The analysis also finds extraregional integration to be mainly responsible for the rise in income inequality that has accompanied globalization.
Subjects: 
composite index
economic globalization
economic growth
extraregional integration
income inequality
intraregional integration
JEL: 
F10
F40
I30
O10
O50
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/3.0/igo/
Document Type: 
Working Paper
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