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Trade shocks from BRIC to South Africa: A global VAR analysis

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  • Çakır, Mustafa Yavuz
  • Kabundi, Alain

Abstract

This paper studies the trade linkages between South Africa and the BRIC (Brazil, Russia, India and China) countries. We apply a global vector autoregressive model (global VAR) to investigate the degree of trade linkages and shock transmission between South Africa and the BRIC countries over the period 1995Q1–2009Q4. The model contains 32 countries and has two different estimations: the first one consists of 24 countries and one region, with the 8 countries in the euro area treated as a single economy; and the second estimation contains 20 countries and two regions, with the BRIC and the euro area countries respectively treated as a single economy. The results suggest that trade linkages exist between our focus economies; however the magnitude differs between countries. Shocks from each BRIC country are shown to have considerable impact on South African real imports and output.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 190-202

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Handle: RePEc:eee:ecmode:v:32:y:2013:i:c:p:190-202
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

Keywords: BRICS; Trade linkages; Global VAR; Trade shocks;

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Find related papers by JEL classification:
  • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
  • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
  • F15 - International Economics - - Trade - - - Economic Integration

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Cited by:

  1. repec:wdi:papers:2014-1073 is not listed on IDEAS
  2. Daniel Zerfu Gurara & Mthuli Ncube, 2013. "Working Paper 183 - Global Economic Spillovers to Africa- A GVAR Approach," Working Paper Series 981, African Development Bank.
  3. Mthuli Ncube & Zuzana Brixiova & Meng Qingwei, 2014. "Working Paper 198 - Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," Working Paper Series 2104, African Development Bank.
  4. Annari de Waal & Renee van Eyden, 2013. "The impact of economic shocks in the rest of the world on South Africa: Evidence from a global VAR," Working Papers 201328, University of Pretoria, Department of Economics.

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