Trade globalization is a type of

economic globalization Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization. Econom ...

and a measure (

economic indicator An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of economic performance and predictions of future performance. One application of economic indicators is the study of business cycles. Economic ...

) of

economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...

. On a national scale, it loosely represents the proportion of all production that crosses the boundaries of a country, as well as the number of jobs in that country dependent upon external trade. On a global scale, it represents the proportion of all world production that is used for imports and exports between countries. * For ''an individual country'', trade globalization is measured as the proportion of that country's total volume of trade to its

Gross Domestic Product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...

(GDP): ::

\frac

* For ''the world as a whole'', trade globalization is the share of total world trade in total world production (GDP), where the sums are taken over all countries: ::

\frac

Definition

Preyer and Brös provide a simple

operationalization In research design, especially in psychology, social sciences, life sciences and physics, operationalization or operationalisation is a process of defining the measurement of a phenomenon which is not directly measurable, though its existence is in ...

of trade globalization as "the proportion of all world production that crosses international boundaries". Chase-Dunn et al. note that trade globalization is one of the types of

, and define trade globalization as "the extent to which the long-distance and global exchange of commodities has increased (or decreased) relative to the exchange of commodities within national societies", and precisely operationalize it as "the sum of all international exports as a percentage of the global product, which is the sum of all the national gross domestic products (GDPs)." Erreygers and Vermeire define trade globalization as "the degree of dissimilarity between the actual distribution of bilateral trade flows and their

gravity In physics, gravity () is a fundamental interaction which causes mutual attraction between all things with mass or energy. Gravity is, by far, the weakest of the four fundamental interactions, approximately 1038 times weaker than the stro ...

benchmark, determined only by size and distance." They note that trade globalization would be maximized in a situation where only size and distance affected the intensity of bilateral trade flows - in other words, in a situation where neither

trade barriers Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work ...

nor other factors would matter.

Salvatore Babones Salvatore Babones (born October 5, 1969) is an American sociologist, and an associate professor at the University of Sydney. Biography He received PhD from Johns Hopkins University in 2003. From 2003 to 2008 he has been a professor of sociology ...

notes that trade globalization is the indicator of a country's level of globalization most commonly used in empirical literature. Data for most countries in the modern era are available from the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

World Development Indicators World Development Indicators (WDI) is the World Bank’s premier compilation of international statistics on global development. Drawing from officially recognized sources and including national, regional, and global estimates, the WDI provides acce ...

database.

Trend

Chase-Dunn et al. note that there have been cyclical waves of trade globalization, with declines corresponding to wars and economic depressions, and that there has been a steady trend over the centuries for trade globalization to increase. With regards to the modern age, trade globalization increased until 1880, then decreased until 1905, increased again until 1914, decreased during

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

, increased until 1929, decreased until the end of

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...

, and has been growing steadily since. They note that the main explanatory factors in this trend are the continued decline in transportation and communication costs, and stability provided by the " hegemonic system" supportive of trade in recent world-systems. Decreases can be explained by wars, and periods of conflict and tension often leading to them, where international actors cannot reach consensus on trade agreements and usually give in to

protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulatio ...

References

External links

Chase-Dunn, Christopher, and Shoon Lio, "Global Class Formation and the New Global Left in World Historical Perspective"

Contains graphs of trade globalization for 1860-2008

{{Globalization History of international trade Economic globalization Global economic indicators Economic integration

Definition

Trend

See also

References

External links