Journal
УКР   ENG
Socio-Economic Problems
of the Modern Period of Ukraine
   



Collection SEPSPU -- sep2025.04.083

Repository of Institute of Regional Research UDC 339.9:327.82; JEL F50, F53, F55, F59
Ivashchuk2 O. V. (2025). Teoretychne obgruntuvannya ta otsinyuvannya ekonomichnoyi dyplomatiyi [Theoretical foundations and assessment of economic diplomacy]. In Sotsial'no-ekonomichni problemy suchasnoho periodu Ukrayiny [Socio-Economic Problems of the Modern Period of Ukraine]: Vol. 174 (4) (pp. 83-94). DOI: https://doi.org/10.36818/2071-4653-2025-4-10 [in Ukrainian].
Sources: 25

Authors



Ivashchuk Oleh Valentynovych

Postgraduate of the Department of international economics of the Western Ukrainian National University

Contacts: oleg.iva12@gmail.com, olegiiva16@ukr.net, o.v.ivashchuk@wunu.edu.ua

Webpages:

Resume

The article argues that the current transformations and changes to the world order require the development of theoretical approaches to assessing economic diplomacy. It substantiates the dual purpose of economic diplomacy. The author emphasizes the absence of a single indicator that would make it possible to assess a country’s economic diplomacy. Countries are analyzed according to the Globalization Index, which structurally encompasses economic globalization. Significant asymmetries are identified. Academic and analytical studies often use indicators of a country’s diplomatic presence to assess its economic diplomacy. The study reviews works in which the authors adopt this approach to determine an integrated indicator. Undoubtedly, for countries leading in terms of the number of diplomatic missions, such a presence contributes to the development of multilateral and bilateral diplomacy. However, there are significant discrepancies between countries’ diplomatic presence worldwide and the number of countries covered by a visa-free regime. The article reveals that methodologies for calculating the Economic Diplomacy Index that are based on the use of macroeconomic indicators cover the trade and investment sectors, as well as macroeconomic trends. In some studies, the assessment is supplemented by indicators of countries’ diplomatic presence, political situation, and the level of development of the legal framework. The analysis reveals the fragmentary nature of the situation and the lack of a consistent methodology (or methodologies) for assessing the economic diplomacy of countries. The author suggests an Integral Index of Economic Diplomacy, comprising the number of multilateral investment agreements, the number of preferential trade agreements, the number of diplomatic missions abroad, the number of visa-free countries, and the social component of the KOF Globalization Index. The sample for the assessment comprises 113 countries. The weight coefficients are determined by the principal component analysis (PCA). The article determines the significance of the first component, which explains 71.94% of the variance, and the second component, which explains 14.93%. Therefore, the weight of the first principal component is used for the assessment. The indicators with the greatest influence on the first principal component are identified. The results of the assessment confirm that it is positively influenced by all variables. A correlation matrix is constructed for the principal components, visually illustrating the relationships between the selected variables and the principal components. A formula for determining the Integral Index of Economic Globalization is proposed and calculations are carried out. Using a clustering method, clusters of countries are identified according to their level of the Integral Index of Economic Diplomacy. The calculation of the Integral Index of Economic Diplomacy confirms significant differences between countries. The group of leaders in terms of economic diplomacy comprises economically developed countries. The distribution of the Integral Index is analyzed. A heat map is constructed to identify the relationships between the variables selected for calculating the Index. Of the selected indicators, the number of diplomatic missions abroad has the least impact on the Integral Index. The article confirms that economic diplomacy combines the tools of foreign economic policy, diplomatic presence, and international economic cooperation.

Keywords:

global order, globalization, economic diplomacy, diplomatic presence, foreign policy, foreign investment, trade, integral index of economic diplomacy

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