Trade globalization

• For an individual country, trade globalization is measured as the proportion of that country's total volume of trade to its Gross Domestic Product (GDP):

${\displaystyle \frac{Imports+Exports}{GDP}}$

• 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:

${\displaystyle \frac{\sum Exports}{\sum GDP}}$

Definition

Preyer and Brös provide a simple operationalization 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 economic globalization, 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 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 nor other factors would matter.

Salvatore Babones 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 World Development Indicators database.