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Analysis of the Nexus between Trade Liberalization and Economic Growth: A Panel Study Of Brics Countries

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  • Nana Asimeng Peasah
  • Barnes Evans John

Abstract

BRICS countries forms a heterogeneous alliance. Their economic and political influence differ. They are distinguished by the outstanding size of their economies; strong growth rates and demand for stronger voice in the international governance and world economies. It is evident that BRICS have opened up their economies more than any other emerging economies. What is not clear to observers, is the extent to which international trade has contributed to the economies of these countries. The study therefore, seek to analyze the causal relationship between trade liberalization and economic growth among BRICS Economies The study used a balanced panel data of the five BRICS Countries, (Brazil. Russia federation, India china and South Africa). For a period spanning from 1990 to 2014. Using a static fixed effect model and a dynamic panel of the Arrelano-Bond approach to GMM we estimate the dynamic impact of trade liberalization on Economic Growth, we found that under both the static and dynamic model, trade liberalization (proxy by TO) was found to exert positive and significant impact on economic growth rate. It is suggested that developing countries that want to follow the path of BRICS economies to economic recognition should consider developing internal institutions that leads to a greater trade openness (liberalization).

Suggested Citation

  • Nana Asimeng Peasah & Barnes Evans John, 2016. "Analysis of the Nexus between Trade Liberalization and Economic Growth: A Panel Study Of Brics Countries," Business and Economic Research, Macrothink Institute, vol. 6(2), pages 455-471, December.
    • Handle: RePEc:mth:ber888:v:6:y:2016:i:2:p:455-471
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    References listed on IDEAS

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    Cited by:

    1. Sayef Bakari, 2017. "The Three-Way Linkages Between Export, Import And Economic Growth: New Evidence From Tunisia," Journal of Smart Economic Growth, , vol. 2(3), pages 13-53, December.

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    More about this item

    Keywords

    BRICS; Panel data; Trade liberalization; Economic Growth; Trade openness;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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