About the paper
The paper is a data-driven globalization report by Steven A. Altman and Caroline R. Bastian of NYU Stern, produced in partnership with DHL.
It is not survey-based; it is a secondary-analysis and index report using more than 9 million country-to-country data points on trade, capital, information and people flows, ranking 180 countries globally.
Its geographic scope is worldwide, with country profiles and regional analysis across major world regions.
Length: 320 pages
More information / download:
https://www.dhl.com/global-en/microsites/core/global-connectedness/report.html
Core Insights
1. Is globalization actually reversing, or is the report arguing that deglobalization is overstated?
The report’s central argument is that deglobalization is overstated. It does not deny that geopolitical risk, tariffs, war, policy volatility and public scepticism have increased. But it argues that the actual data on cross-border flows do not show a broad retreat from international to domestic activity.
The DHL Global Connectedness Index reached a record high in 2022 and has remained broadly stable through 2025. The report’s key measure of “depth” — international activity relative to domestic activity — sits at around 25%. That means globalization is historically high, but still limited: the world is far from “hyperglobalized”. Most economic and human activity still happens within countries rather than across borders.
This distinction is central to the report’s logic. The authors are not saying that globalization is smooth, frictionless or politically uncontested. They are saying that globalization is being reshaped rather than reversed. The world is more volatile, but not meaningfully less connected.
2. What evidence does the report give that global flows remain resilient?
The report examines four broad types of flows: trade, capital, information and people.
On trade, the report finds that goods trade grew faster in 2025 than in any year since 2017, excluding the post-Covid rebound. Part of this was driven by U.S. importers front-loading goods before tariff increases, but China’s exports to non-U.S. markets and AI infrastructure investment also supported growth. AI-related goods reportedly accounted for a large share of goods trade growth in the first three quarters of 2025.
On capital, the picture is more mixed, but not one of retreat. Foreign direct investment and M&A activity remain broadly in line with historical patterns, even though greenfield FDI announcements weakened in some areas. The report emphasises that companies continue to invest abroad and that multinational firms still conduct close to record shares of activity outside their home markets.
On information, the report is more cautious. Information flows have been the fastest-growing part of globalization over the past two decades, but some indicators have plateaued or weakened since 2021. International patenting has slowed, scientific collaboration has declined slightly, and cross-border intellectual property flows have eased. The report suggests that geopolitical tensions and data restrictions may now be constraining this part of globalization.
On people, the report finds that international travel has recovered from the Covid-19 collapse, while international student mobility and migration remain on longer-term rising trends. However, people flows remain the least globalized category: only a small share of the world’s population lives outside its country of birth.
3. How serious is geopolitical fragmentation, especially between the U.S., China and Russia?
The report treats geopolitical fragmentation as a real risk, but argues that its global effects remain limited so far.
The clearest evidence of fragmentation is in U.S.–China ties. Since 2016, the share of U.S. trade, capital, information and people flows involving China has fallen substantially, while China’s share involving the U.S. has also declined. Direct U.S. imports from China fell from a peak of 22% in 2017 to 13% in 2024, and then to 9% during the first three quarters of 2025.
However, the report adds an important complication: the U.S. has not necessarily reduced its underlying reliance on Chinese content. Goods imported from third countries may still contain Chinese inputs. When looking at direct and indirect China-origin content, the report says there is no clear evidence of a major decline in U.S. reliance on goods from China through 2024.
Russia is the more dramatic case. Since the full-scale invasion of Ukraine, Russia’s flows with the EU have collapsed across trade, investment, information and people flows. Russia’s exports have become less diversified and more dependent on a few destinations such as China, India and Türkiye.
But the report’s broader conclusion is that these cases do not amount to a global split into rival blocs. Only a small share of global trade and investment has shifted away from geopolitical rivals. Most international business already takes place among friendly or neutral countries, which limits the likely impact of “de-risking” on globalization as a whole.
4. Is globalization being replaced by regionalization or nearshoring?
The report’s answer is: not yet, at least not in the data.
Despite widespread discussion of nearshoring, friendshoring and regional supply chains, the report finds that many international flows are crossing longer, not shorter, distances. The average distance traversed by flows in the DHL Global Connectedness Index reached a record high in 2024. Goods trade and greenfield FDI crossed record average distances in 2025.
This directly challenges the idea that globalization is giving way to regionalization. If international activity were becoming more regional, the average distance covered by flows should be falling. Instead, the report finds the opposite for several major flow types.
That said, the report does not dismiss regionalization entirely. It notes that many governments and companies are interested in nearshoring and supply-chain resilience, and that such changes can take years to implement. It also acknowledges that international flows are already highly regionalized: roughly half of global trade, capital, information and people flows occur within major world regions. The report’s point is not that regionalization is irrelevant, but that there is not yet robust evidence of a major new shift from global to regional patterns.
5. Which countries are most globally connected, and what does that reveal about globalization?
Singapore ranks as the world’s most globally connected country, followed by Luxembourg, the Netherlands, Ireland, Switzerland, Hong Kong SAR, the United Arab Emirates, Belgium, the United Kingdom and Denmark.
The report distinguishes between two dimensions of connectedness: depth and breadth. Depth measures the size of international flows relative to domestic activity. Breadth measures how widely a country’s flows are distributed across the world.
Small, wealthy economies tend to score highly on depth because their domestic markets are limited and they rely heavily on cross-border trade, capital, people and information flows. That explains the strong performance of places such as Singapore, Luxembourg, Hong Kong, Ireland and the UAE.
Larger economies often score higher on breadth than depth. The United Kingdom ranks first on breadth, followed by the United States, the Netherlands, Switzerland, Israel, France, Italy, Germany, Japan and Australia. These countries have flows that reach widely across the world, but their large domestic economies mean that international activity can still represent a smaller share of total activity.
This country-level analysis reinforces one of the report’s core themes: globalization is uneven. Some countries are deeply and broadly connected, while others remain peripheral. Wealth, peace and security, openness, regional integration, infrastructure and domestic business conditions all shape how connected a country becomes.