The Dynamics of Trade and Investment on the Expansion of BRICS Economies

Purpose: The dynamics of trade and investment in the context of BRICS economies, provide crucial insights into how emerging economies influence economic growth and development and unlock the potential for cooperation among member states. BRICS has become a major global key player due to the advantage in demographic, geographic and economic attributes peculiar to the economies. Deeper ties and cooperation among BRICS have fostered growth and development from trade openness, capital inflow, acquiring technological know-how and administrative abilities to growing economies. Hence, the study assessed the dynamics of trade and investment in the expansion of BRICS economies Methodology: The study employed cross-sectional models via the panel-corrected standard error, Discrol and Kraay and Augmented Mean Group in the context of BRICS and BRICS+ countries between 1990 and 2022. Thus, contributes to a deeper understanding of the economic integration and performance of emerging markets. Furthermore, the study evaluates the Dumitrescu–Hurlin panel causality to answer the question of potential causation among the variables. Results: Findings reveal that trade and FDI have a dynamic impact on the expansion of BRICS economies. An increase in BRICS membership situates an increase in market coverage, the spread of the spillover effect, and deeper ties and cooperation among BRICS. Trade openness has a positive and significant impact on the BRICS+ economies. Meanwhile, FDI has a negative and significant impact on the BRICS+ economies. There is a bidirectional relationship between trade openness, foreign direct investment and economic growth in the expansion of BRICS economies. Conclusion: This study concludes that trade openness and foreign direct investment should be used to foster more of deeper ties and cooperation than economic profit among BRICS.