Intra-BRICS Trade: A Panel Data Analysis with Structural Breaks

Alper Yilmaz ()
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Alper Yilmaz: Adnan Menderes University, Soke Faculty of Business Administration, Aydin, Turkiye

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2022, vol. 72, issue 72-2, 653-687

Abstract: This article attempts to examine the recent developments that have amplified the consequences of uncertainty regarding trade between Brazil, Russia, India, China, and South Africa (BRICS) countries under global economic turmoil such as occurred in the 2008 financial crisis and trade wars sparked by the USA and the COVID-19 pandemic. These events severely affected intraBRICS trade and investment. For this purpose, we employed the Westerlund and Edgerton cointegration approach to check for cointegration under structural breaks and the procedure for the asymmetric Granger non-causality test to assess the causal relationship between the custom tariff and export variables of BRICS countries with regard to the panel data methodology for the 2000-2020 period using annual data. The empirical results for cointegration indicate the presence of a long-term relationship; in other words, they are seen to move together under investigation. The estimated breakpoints correspond with 2008 and the ongoing financial turmoil and with the 2018-2020 period and the rising trade disputes between USA and China. In addition, the Granger non-causality test provides enough evidence to show opposite directions (signs) for the causal links between the variables that run from tariffs to exports for BRICS countries.

Keywords: International trade; Tariff; Panel data analysis JEL Classification: F10; F13; F23 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:72:y:2022:i:2:p:653-687

DOI: 10.26650/ISTJECON2022-1096747

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