Trade Openness and Economic Growth Nexus: A Case Study of BRICS

Abstract

The article analyses a causal relationship between trade openness and economic growth for the member countries of BRICS by using an econometric technique of time series analysis. Member countries of BRICS adopted a series of liberalization reforms, almost simultaneously, from the late 1980s. The article attempts to study the impact of trade openness on their growth in GDP per capita. It captures structural composition of GDP and openness of trade in four aspects, that is, merchandise exports, merchandise imports, services export and services import. In India, the study found growth-led trade in services hypothesis. The article supports the growth-led export and growth-led import hypothesis for China and export- and import-led growth for South Africa. However, no causal relationship was evident for Brazil and Russia. JEL Codes: F43, C22