World trade indicators and a new approach to measure globalisation and countries' openness

Since mid-1980s, globalisation has been increasingly the centre of discussion. Especially, trade globalisation has taken the centre stage. However, there are no measures for determining globalisation. This paper provides some alternative globalisation indicators. In particular, we use the concept of Z-score to divide countries into six categories of globalisation, from unglobalised to fully globalised. Although numerous studies use the sum of imports and exports for trade studies, equally as many use the imports and exports as percentages of GDP for their research. This paper demonstrates the advantages and disadvantages of each and how they affect globalisation indicators. This paper is the first attempt to create a meaningful and statistically sound globalisation index. A reliable globalisation index is the first step towards objective study of this complex phenomenon.