Practical analysis for investment professionals
27 October 2012

Pankaj Ghemawat: Globalisation or Globaloney?

Pankaj Ghemawat began his presentation by asking delegates at the Fifth Annual European Investment Conference a series of provocative questions. How global are we? What patterns do we observe about our inter-connectedness? And finally, what are the implications for Europe?

Popular perceptions today are that the world is shrinking, technology is reducing the barriers to distance, and national borders are increasingly unimportant. Yet Ghemawat contends that despite the benefits and ease of technology, human behaviour still matters, distance still matters, and yes, borders still matter — and these factors overwhelm the perception of a small, frictionless world. Citing evidence from his primary research on the subject of globalisation, Ghemawat argued that we are a lot less globalised than many people perceive. He shared data highlighting the percentage of all telephone calls that are international (2%), the percentage of all citizens in a given country who are recent immigrants (3%), the percentage of all foreign direct investment (10%), and finally, the percentage of all exports relative to GDP (30%). Importantly, Ghemawat argued, most people overestimate the percentages in each of these categories by a substantial margin — hence, he refers to globalisation as “globaloney”.

Read more on the European Investment Conference blog →

About the Author(s)
Ron Rimkus, CFA

Ron Rimkus, CFA, was Director of Economics & Alternative Assets at CFA Institute, where he wrote about economics, monetary policy, currencies, global macro, behavioral finance, fixed income and alternative investments, such as gold and bitcoin (among other things). Previously, he served as SVP and Director of Large-cap Equity Products for BB&T Asset Management, where he led a team of research analysts, 300 regional portfolio managers, client service specialists, and marketing staff. He also served as a Senior Vice President and Lead Portfolio Manager of large-cap equity products at Mesirow Financial. Rimkus earned a BA degree in economics from Brown University and his MBA from the Anderson School of Management at UCLA. Topical Expertise: Alternative Investments · Economics

1 thought on “Pankaj Ghemawat: Globalisation or Globaloney?”

  1. Prasad says:

    Ron, the link given below links to this page itself (a recursive link!!).

    It would be interesting to compare these metrics (% of international calls), (%age of FDI), etc. between developed and developing nations. Although something tells me that there will be marginal differences between these two segments!

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