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What Shapes Economic Growth in BRICS? Exploring the Role of Institutional Quality and Trade Openness

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  • Megha Chhabra
  • Arun Kumar Giri
  • Arya Kumar

Abstract

Prior research has identified outward‐oriented policies as a far superior approach to achieving economic growth. Whilst trade openness determines economic growth in the short run, institutional quality is critical to long‐term viability. However, the direct and indirect effects of institutions have been understudied, particularly for the Brazil, Russia, India, China and South Africa. This study addresses this issue by estimating long‐run and short‐run elasticities using the system GMM and pooled mean group models and identifying its country‐specific impact using the fully modified ordinary least square model. According to the findings, trade and institutions are only short‐run complements of economic growth. In the long run, however, the lack of good governance limits the positive impact of trade openness.

Suggested Citation

  • Megha Chhabra & Arun Kumar Giri & Arya Kumar, 2023. "What Shapes Economic Growth in BRICS? Exploring the Role of Institutional Quality and Trade Openness," Economic Papers, The Economic Society of Australia, vol. 42(4), pages 347-365, December.
    • Handle: RePEc:bla:econpa:v:42:y:2023:i:4:p:347-365
    DOI: 10.1111/1759-3441.12378
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