The Impact Of Trade And Export On Economic Growth: A Panel Data Analysis Of Brics Countries

Abstract

This study aims to estimate the impact of export on economic growth in BRICS countries by utilizing panel data over the time period from1990 to 2017. Gross Domestic Product Per Capita (GDPPC), GDP (current US$) and export earnings were used as dependent variables and independent variables included oil rents (percent GDP), imports (US$), Export (US$), Tax revenue (percent GDP), population growth, Government consumptions, food production, inflation consumer price, trade, trade openness, gross capital formation, foreign investment, and debt services in the study. Levin Lin Chu, I'm, Pesaran and Augmented Dickey-Fuller (ADF) unit root tests were employed to check the stationarity. Results found that some variables were integrated at different differences and others integrated at level indicating the use of Autoregressive Distribution Lag (ARDL) Model. Results were investigated in two phases. In the first phase, ARDL was used for analysis purpose, the findings of which revealed that a long-run relationship between Oil rents (percent GDP), Export (US$), population growth, Government consumption, food production, inflation consumer price, trade, trade openness, gross capital formation, foreign investment, and debt services. Having limited natural resources, underdeveloped countries face low exports and as consequently less export earnings, hindering economic growth. In the second phase the Granger causality test was applied to examine the direction of causality between GDP per capita and export earnings. Our study found a positive relationship between export earnings and economic growth.”