Local Advantage in a Global Context
Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough
12. Globalization and distribution of exports Börje Johansson and Désirée Nilsson During the 1980s, many economists started to use the term globalization as a catchword for an increased interaction between countries in world trade. The literature does not provide a clear definition of globalization. We set up a number of criteria and formulate hypotheses about globalization that we explore for Swedish export flows during the years 1965–2000. Globalization, in this study, is referred to as increases in country diversity, extended transport radii, less effect of distance on trade flows, and the ratio of exports to the importing countries’ incomes. The results from the empirical analysis do not support the hypotheses of increasing trade globalization. It is rather the case that export flows are becoming more internationally regionalized. 12.1 INTRODUCTION What is economic globalization? The literature does not offer a clear definition of the concept. However, in this connection one often refers to integration, openness and the mobility of production factors. The extent of openness (export and import as a ratio to GDP) is continuously increasing since many countries in the world are opening up to international trade. Free trade agreements, customs unions and other types of cooperation between countries are also constantly being established. The integration of financial markets has been just as extensive as that of the commodities market. This study will consider only the global integration of the commodities market by focusing on the aggregate export flows of one small open economy, Sweden. It...
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