Measuring the Globalization Degree of Foreign Direct Investments from 2001 to 2012: First Interpretations

Bruno G. Rüttimann () and Pavlos Stamatiou ()
Additional contact information
Bruno G. Rüttimann: Inspire AG/ETH Zürich

Chapter Chapter 42 in Advances in Panel Data Analysis in Applied Economic Research, 2018, pp 573-591 from Springer

Abstract: Abstract This paper measures the globalization degree of financial capital investments based mainly on elaborated UNCTAD data from 2001 to 2012. The paper is a joint research project and sets the base for an annual update to gain insight into the rational logic of foreign direct investments (FDI). The globalization degree is measured with a new statistical entropy risk metric which computes the interweaving of capital flows. The FDI Capital Globalization type 2a is part of a more comprehensive globalization types model. The entropy-based metrics used to compute the interweavement of capital flows is based on a Boltzmann-derived concept of entropy, i.e., the higher the order (high inequality), the lower the entropy, leading to a new defined statistical entropy. Translated to economy, the higher the inequality (high concentration of flows), the lower the entropy, i.e., the lower the globalization degree resulting in a higher risk of the economic system. The first results show that FDI during the analyzed period are globalizing. Different than the trade globalization of type 1, where Asia has emerged to become the most globalized region, for the FDI, Europe shows to be the most globalized region. The questions to be answered in this long-term study will deal whether the weakening global trade volume will be substituted by increasing capital investment in new emerging regions or what drives the investment logic.

Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-70055-7_42

Ordering information: This item can be ordered from
http://www.springer.com/9783319700557

DOI: 10.1007/978-3-319-70055-7_42

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().