A T Kearney Index Limitations

A T Kearney Index Limitations

1. Only 64 Countries are included in the index.

2. Smaller countries tend to take the top place in the index due to higher proportion/ importance of FDI, suggesting an over importance of the size of the country.

3. Who are the weightings decided by? How are cultural trends measured?

4. Other indices used to measure globalisation include:

   • IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) – this records the existence of restrictions to trade in different countries.
   • The KAOPEN Index of openness to capital. This index was established by Chinn and Ito in 2005 and measures how easy it is to invest and withdraw investment in different countries.