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The Nexus of Trade Openness, Institutions and Economic Growth: An Empirical Investigation of BRICS Countries

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  • Mehraj Ahmad Sheikh
  • Mushtaq Ahmad Malik

Abstract

The empirical limits of this study lie in investigating the nexus between trade openness, institutional quality and economic growth in emerging BRICS countries. Having nascent institutions, the study aims to analyse their role in determining the trade–growth relationship. Using endogeneity expunging GMM technique, the empirical evidence shows—first, imports play a crucial part in augmenting growth. While exports and overall trade openness do show a positive impact, they lack the statistical significance. Second, institutional infrastructure shows an indirect effect by augmenting the economic performance when complemented with higher imports. These countries stand to gain more from imports with improved institutional infrastructure. JEL Codes: F10, O4, C23

Suggested Citation

  • Mehraj Ahmad Sheikh & Mushtaq Ahmad Malik, 2021. "The Nexus of Trade Openness, Institutions and Economic Growth: An Empirical Investigation of BRICS Countries," Foreign Trade Review, , vol. 56(2), pages 206-215, May.
    • Handle: RePEc:sae:fortra:v:56:y:2021:i:2:p:206-215
    DOI: 10.1177/0015732521995162
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    2. Thanh Dinh Su & Canh Phuc Nguyen, 2022. "Productive Contribution of Public Spending and Human Capital in Developing Countries Revisited: The Role of Trade Openness," Foreign Trade Review, , vol. 57(1), pages 66-84, February.

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    More about this item

    Keywords

    Trade openness; institutions; economic growth; BRICS;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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