DOI: 10.3897/brics-econ.7.e185197

Authors: David Umoru, Rashidah Elamah, Beauty Igbinovia

Abstract: The study explores the stochastic impacts of the exchange rate fluctuation and the synergistic effects of monetary-fiscal expansion simulations on export growth in Asia. It attempts to fill the gap between theoretical policy development and the practical uncertainty of policymakers in the emerging Asian markets. The study is based on dual methodological approach. The study is based on a dual methodological approach. First, a Panel System Generalised Method of Moments (GMM) is used on a panel of Asian economies to identify structural determinants and interaction effects. Second, a Bayesian-estimated Medium-Scale version of the Dynamic Stochastic General Equation (DSGE) is employed to simulate the time-dependent reactions of exports to different policy and uncertainty shocks within twenty years span (the horizon taken to be twenty quarters). DSGE estimation was based on 26 years of historical data (January 1, 2000-December 31, 2025), and the impulse-response functions were simulated with horizon of twenty quarters (five years), which is compatible with canonical frequencies of business cycles taking into cognizance the transmission lags that accompany monetary and fiscal policy interventions required for the confirmation of the DSGE model convergence to the steady state. Besides, the homogeneity of monetary-fiscal policy regime that characterized the post-2000 era provides stability in the estimated deep parameters over the sample thus fulfilling the Lucas critique. The GMM estimation shows that financial development and credit expansion are the most powerful structural forces of exports. Financial maturity only amplifies the advantages of competitive devaluations, according to the correlation between exchange rates and financial depth. The simulations in DSGE also show a coordinated expansion to be the most powerful stimulus as it will result in the greatest growth of exports of 0.934. A significant dampening in export growth is seen through policy uncertainty which is a big pull of exports in the economies of Asia. Conversely, the level of expansion of money supply, availability of domestic credit, financial development and consumption of energy has a positive impact on exports which in turn brings about the significance of liquidity, financial depth and production capacity in export expansion. The empirical evidence suggests that the competitiveness channel effect in the region of Asia is 0.867%. This gain is, nevertheless, dependent on financial maturity. In the case of the 16 poorest nations, the overall impact of monetary and fiscal expansion is expected to be positive if these economies are coupled with institutional reforms that reduce the cost of energy and debt. The simulated responses reveal stark structural asymmetries across the sample. While nominal exchange rate depreciation and co-ordinated monetary expansions represent extremely effective but necessarily short-lived export shocks - peaking invariably in Quarter four and reverting to the mean in Quarter twelve - the longer-run effects differ markedly. Bayesian inferences confirm that financial development is the only structural parameter that may lead to permanent (non-mean-reverting) export growth. By contrast, institutional weakness in forms of policy uncertainty, energy costs and black market labour exports inflicts significant negative asymmetries upon the fragile. The results show that the only way to avoid cyclical volatility is to prioritise holistic financial market development over short-term macroeconomic policymaking. The study provides a contribution to the literature by developing a methodological interface between the reduced-form empirical research and structural general-equilibrium modelling in the emerging Asian markets. It separates the structural processes to determine the causal transmission processes of monetary-fiscal synergy and exchange-rate volatility on export growth in a Bayesian DSGE model with diffuse priors adapted to the high-volatility regime typical in developing Asia. The model explicitly measures the sensitivity of the effectiveness of conventional policies that promote exports to policy uncertainty, as well as the fear of floating, which can be unduly precarious in linear panel regressions by including a stochastic volatility factor. The research establishes that the Asian poorest economies are constrained by structural asymmetries. The credibility intervals around the 90% high-posterior-density (HPD) intervals with prior means robustly confirm that, while these countries are equipped with highly elastic short-term absorption capacities to monetary and currency shocks, these economies are by nature incapable of permanently shifting their long-term economic paradigms via cyclical policies. Weak economies disproportionately suffer from policy uncertainty and supply-side restrictions, and are thus more likely to cancel out the effects of positive exchange rates.

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DOI: 10.3897/brics-econ.7.e172739

Authors: Bekzod Allamuratov, Shah Mir Mowahed

Abstract: Digital services trade (DST) has emerged as an important driver for economic growth and development, which has attracted increasing attention from governments, policymakers, scholars, and industry stakeholders. This paper examines the impact of DST on economic growth in 87 developing countries from 2005 to 2023. Using advanced ML methods, specifically the CrossFit Partialing-out LASSO linear regression (CrossFit POLR), the study shows that the DST has a positive and statistically significant impact on GDP. The robustness of these findings is further validated by Bayesian Model Averaging, Driscoll-Kraay standard error correction, and alternative DST proxy variables. The mechanism analysis reveals that employment and technological innovation serve as important mediators in the relationship between DST and GDP. The heterogeneity analysis indicates that low-income, upper-middle-income and high-income developing economies, as well as countries with strong digital infrastructure, derive greater economic benefits from DST compared to lower-middle-income countries and those with weaker digital infrastructure. Based on these empirical findings, the study proposes policy recommendations aimed at enhancing the developmental benefits associated with DST in developing countries.

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DOI: 10.3897/brics-econ.7.e138473

Authors: Palesa Lefatsa, Gabila Nubong

Abstract: This study investigates the interconnections between financial development, economic growth, and energy consumption within the Southern African Development Community (SADC) region between 1980 and 2023. Using the Panel Autoregressive Distributed Lag (PARDL) model alongside Dumitrescu and Hurlin (2012) causality tests, the research provides new insights into the dynamics of these variables. The study reveals a significant positive correlation between financial development, economic growth, and energy consumption. The key finding is the negative relationship between energy consumption and urbanization, while no significant linkage is found between energy consumption and industrialization. The Granger causality test reveals a unidirectional causal link between financial development, urbanization, and energy consumption, and a bidirectional relationship between economic growth and energy consumption. These findings contribute to existing literature by offering a more nuanced understanding of the region’s energy consumption dynamics compared to previous studies that have often presented inconclusive or context-specific results. This study extends previous research by examining the unique economic and energy challenges faced by the SADC countries, providing fresh evidence for policymakers focused on integrating financial sector development with sustainable energy policies. The study suggests that investing in renewable energy and expanding electricity access, especially in rural areas, could enhance both urbanization and financial sector growth, fostering broader economic development. The diagnostic checks affirm the robustness and reliability of the model, ensuring the validity of the findings.

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DOI: 10.3897/brics-econ.7.e154361

Authors: Lindokuhle Talent Zungu

Abstract: This study aims to explore the impact of the BRIC trade agreement on economic growth in South Africa over the period from 2009Q1 to 2023Q4, taking into consideration the BRIC agreements on promotion of trade and investment, and enhancement of economic growth and sustainable development. The study uses South African time-series data to estimate a Bayesian Vector Autoregression (BVAR) model with hierarchical priors as it can deal with many problems in the data without exhausting degrees of freedom. It also handles dense parameterization by giving model coefficients a structure and making them as informative as possible. The results suggest that trade agreements have a positive impact on South Africa’s economy. They indicate that economic growth can be positively influenced by a 1% unexpected increase in imports, exports, and foreign direct investment from the BRIC partner countries. These findings mean that trade deals with the BRIC nations and the promotion of investment can significantly contribute to South Africa’s economic development. It has also been shown that SA’s government spending enhances growth and sustainable development. The positive impact of the BRICS partners’ imports, exports, and FDI on South African growth highlights the need for trade and investment integration. Policymakers should reduce trade barriers, enhance infrastructure, and improve the business environment to attract more FDI from the BRIC member countries. Strengthening trade agreements within BRICS can expand market access, boost industrial competitiveness, and increase technological transfer. Long-term strategies should create stable, open economies fostering innovation, employment, and sustainable growth.

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DOI: 10.3897/brics-econ.7.e151598

Authors: Tijani Forgor Alhassan, Gaukhar Kalkabayeva, Anar Kurmanalina

Abstract: The adoption and integration of artificial intelligence (AI) in Ghana’s and Kazakhstan’s financial sectors signifies a transformative change, driven by technological advancement and pursuit of greater efficiency, improved risk management and enhanced customer experience. The study provides a comparative analysis of AI adoption in developing countries, focusing on key areas such as banking, investment management, legal compliance and financial inclusion. AI adoption is gradually gaining attention in Ghana, where fintech start-ups and traditional banks are using AI for mobile banking, fraud detection, and credit scoring. However, challenges such as poor infrastructure, data security concerns and lack of a skilled workforce impede the widespread implementation of AI and its full realization. In contrast, Kazakhstan has made significant progress in adopting AI, driven by government initiatives, robust digital infrastructure, and growing fintech ecosystem. Financial institutions in Kazakhstan use AI for algorithmic trading, regulatory compliance and customer service automation, positioning the country as a regional leader in fintech innovation. Despite differences in the countries’ approaches to adopting AI, both economies face similar challenges, such as algorithmic bias, regulatory uncertainty and capacity-building needs. The present paper explains why tailored growth strategies are needed to address these issues. It highlights the importance of investment, public-private partnerships and legal frameworks in upskilling professionals and creating technological infrastructure. The two countries should develop roadmaps for AI-tailored growth policies in their financial sectors to ensure their effective adoption and implementation for financial development.

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DOI: 10.3897/brics-econ.7.e170868

Authors: Yang Jingjing, Shah Mir Mowahed, Mariam Reha

Abstract: In recent decades, the role of institutions has become a central topic of discussion among scholars and policy makers. This study used time-series data from Afghanistan between 1996 and 2024 to gain new insights into the impact of political instability (POI), corruption (COR) and government effectiveness (GEF) on economic growth. The results of Quantile-on-Quantile Regression and Wavelet Quantile regression reveal that POI, COR, and GEF have adverse and statistically significant effects on GDP growth across all quantiles and over long-term time periods. Event analysis through the interrupted time series technique shows that the key political events, including the Civil War (CW), the First Round of the Taliban Regime (FRTR), U.S.-NATO interventions (USN), the Second Round of Taliban Regime (SRTR), and Regime Changes (RCH), have had a negative impact on Afghanistan’s GDP growth. The immediate impact of the Soviet Union’s war is estimated to be positive. At the same time, Afghanistan’s GDP experienced negative growth during SUW, CW, FRTR, and RCH, while during USN and SRTR, the GDP growth was positive. Based on these findings, the paper discusses possible policy implications.

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DOI: 10.3897/brics-econ.7.e171174

Authors: Yanan Zhao, Elena Frolova

Abstract: ESG governance in emerging economies is facing a major challenge: the use of global standards is expanding rapidly, but institutional asymmetries, regulatory capacity constraints and ownership structures are limiting their effective implementation. Existing empirical research still focuses on developed markets, but firm-level data on ESG corporate governance for BRICS is still scarce, even though these countries play a crucial role in global sustainability transitions. Following the PRISMA framework, this study systematically reviews 45 peer-reviewed articles on ESG corporate governance in BRICS (2021–2025) indexed in Scopus and Web of Science. Using VOSviewer keyword co-occurrence analysis, we code evidence on governance mechanisms, theoretical frameworks, research designs, policy references, empirical outcomes and regional disparities. The findings show fragmented yet rising attention to the issue, with China and India relying on state-led frameworks and South Africa following code-based, market-oriented rules. Russia and Brazil display weaker visibility in English-language journals. Board composition, ownership concentration and executive incentives appear to be decisive, but enforcement is weakened by institutional gaps. Evidence clusters around the four themes: governance and performance, ESG and firm value, ESG and risk, gender and diversity. Theory application remains limited: stakeholder, agency and institutional theories are often cited but rarely operationalised. The study extends ESG governance research by incorporating cross-country institutional contexts into a comparative analysis. Practically, ESG governance requires a closer alignment between policy development and local capacity, stronger enforcement, and more diverse research approaches. Under the right conditions, the BRICS countries can contribute to shaping global ESG standards and advance sustainable development.

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DOI: 10.3897/brics-econ.6.e144680

Authors: Patrick Nahabwe

Abstract: This study investigates debt-to-pay-debt syndrome in Uganda from 1980 to 2022 using a quantitative approach with ARIMA modelling to evaluate public debt sustainability. Balanced time series data from the World Bank is analysed with public debt (% of GDP) as the dependent variable, incorporating autoregressive (AR) and moving average (MA) components as independent variables. Parameter estimation is conducted using Maximum Likelihood Estimation (MLE), with diagnostic tests ensuring model robustness. Results show that the AR(1) coefficient (0.350489), is positive and statistically significant, meaning that 35% of the current year’s debt is used to service the previous year’s debt. This finding confirms the persistence of the debt-to-pay-debt cycle in Uganda. The estimated ARIMA (1, 1, 11) model is both covariance stationary and invertible, making it reliable for forecasting public debt trends over the next decade. Forecasts suggest that the debt-to-pay-debt pattern will continue unless corrective measures are taken. The study recommends implementing comprehensive debt management policies to reduce reliance on new borrowing. This includes enforcing stricter fiscal rules and promoting revenue diversification through emerging sectors such as digital economies, agricultural value addition, mineral resources, and oil and gas.

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DOI: 10.3897/brics-econ.6.e146580

Authors: Lumengo Bonga-Bonga

Abstract: This paper contributes to the literature on the policy trilemma by evaluating potential policy combinations for the original BRICS within the framework of the Impossible Trinity. It also introduces a novel modelling approach that defines a boundary for the linear combination of variables associated with the policy trilemma. The findings reveal that the trilemma emerges from the interplay of these three policy dimensions. Given the global influence of the BRICS countries, the results suggest that, if they maintain a fixed exchange rate system, they will likely have to sacrifice either free capital movement or independence from monetary policy. This loss of flexibility could be particularly detrimental, considering their significant international influence and their role as major recipients of capital flows for trade and financial transactions. Consequently, the optimal policy combination for BRICS is free capital flow, monetary independence, and a flexible exchange rate.

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DOI: 10.3897/brics-econ.6.e145573

Authors: Benjamin Bensam Sambiri, Noah Cheruiyot Mutai, Onyekachi Osisiogu

Abstract: Sub-Saharan Africa (SSA) has abundant natural resources and attracts substantial investment, especially from China, but sustainable growth remains limited. This study examines the persistent disconnect between resource wealth, foreign financing, and long-term economic performance in the region. Using 20 years of panel data from 31 SSA countries, we estimate seven econometric models — including fixed effects, dynamic panels, and instrumental variables (IV) — to assess the long-run impact of natural resource rents, Chinese investment, trade flows and foreign direct investment (FDI) on GDP growth.Exports are consistently associated with stronger economic growth. By contrast, Chinese investment does not show a robust effect across specifications. Natural resource rents have a weak or no correlation with growth, but become significant in the IV model, suggesting that their impact is mediated by institutional quality. Imports are negatively or insignificantly associated with growth until endogeneity is addressed, after which their effect turns positive indicating the importance of trade efficiency. FDI consistently correlates with lower growth, pointing to problems such as capital flight or extractive investment practices.This study challenges the assumption that Chinese finance and resource abundance are driving development in SSA. The findings highlight the critical role of effective governance, transparent resource management, and coherent trade and investment policies. Policymakers need to align external finance and natural resource use with institutional reforms to promote sustainable growth.

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DOI: 10.3897/brics-econ.6.e141556

Authors: Gladys Fernandes-Gondoza, Ronney Ncwadi, John Manuel Fernandes, Farai Nyika

Abstract: Purpose: In this paper, we study the potential of using Artificial Neural Network (ANN) models to predict currency crises in emerging markets, with a specific focus on the South African economy. South Africa’s rand is one of the most volatile currencies in the world and is prone to crises. Methodology: We built two ANN models, where Model 1 uses ten economic indicators and Model 2 uses four. These models were assessed for statistical significance (using probit analysis), and their performance in predicting major South African currency crises (e.g., 1998, 2001, and 2008) was tested with both in-sample and out-of-sample data. Results: The first model was much more accurate than Model 2 in predicting early warning signs nearly two years before the currency crises occurred. Model 1’s higher accuracy is attributed to its inclusion of a greater number of economic variables. Both models occasionally produced false positives, though overall, they were very accurate in predicting crises. Originality: Our paper highlights the importance of ANNs in capturing nonlinear patterns in economic data, demonstrating their strength as early warning tools for financial crises. We recommend that ANN methods continue to be researched and advanced to further reduce false positives and improve predictive performance.

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DOI: 10.3897/brics-econ.6.e146935

Authors: Imran Ali

Abstract: This study examines the key economic, environmental and governance determinants of the Human Development Index (HDI) in Pakistan, using a multidimensional framework to analyze their long- and short-term dynamics. Using annual data from 1990 to 2022 the research applies Johansen Cointegration Test and Vector Error Correction Model (VECM) to assess the relationships between HDI and factors that may exert influence on its dynamics, including exports, remittances, military expenditure, carbon dioxide emissions, debt service, population growth, and women’s parliamentary representation. Its findings reveal that governance and demographic factors, particularly women’s representation in parliament and population growth, have significant positive impacts on the country’s HDI in the long run, highlighting the importance of inclusive governance and resource management. Conversely, economic variables such as exports and remittances appear to have negative long-term effects on the HDI, suggesting structural inefficiencies in Pakistan’s trade and remittance policies. Environmental degradation, represented by carbon dioxide emissions, poses a significant challenge with adverse effects on the HDI, in both the short and long term. Military expenditure demonstrates dual effect: while it supports the HDI in the long run by fostering stability, in the short run it diverts resources away from critical social investments. The study emphasizes the need for policy reforms to diversify exports, formalize remittance channels, and adopt sustainability-focused environmental strategies. To promote equitable development, it is essential to increase women’s representation in governance and balance the defense and social spending. This research contributes new insights by integrating economic, environmental, and governance dimensions into unified analytical framework tailored to Pakistan’s socioeconomic context and provides actionable recommendations for policymakers to prioritize sustainable and inclusive development initiatives in line with the global Sustainable Development Goals (SDGs).

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DOI: 10.3897/brics-econ.6.e138454

Authors: Palesa Lefatsa, Gabila Nubong

Abstract: The paper presents an empirical study of the relationships between financial development, economic growth, urbanisation and energy consumption in the Southern African Development Community for the years 1980 to 2023. The researchers applied the Bayesian approach via Metropolis-Hasting and Gibbs samples as the MCMC methods, and Dumitrescu and Hurlin (2012) and Diagnostic tests to check the causality among all the variables in question and accuracy of the data and model. Over time, there has been a significant positive correlation between financial development, economic growth, industrialization, urbanization, and energy consumption. The results of the Granger causality test showed a unidirectional causal relationship between financial development, urbanization, and energy consumption supporting the alternative hypothesis that there is a relationship between financial development and energy consumption in the Southern African Development Community. It has been found that there is a Bi-directional (feedback) Granger causal relationship between economic growth and energy consumption in the Southern African Development Community; this also supports the alternative hypothesis. The results align with endogenous growth theory, which emphasizes that economic growth is driven by internal factors such as capital accumulation, innovation, and improved efficiencies, where energy plays a significant role. This also supports the view that energy infrastructure development is vital for sustaining economic growth in the region. The diagnostic tests confirm that the model is correct.

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DOI: 10.3897/brics-econ.6.e134961

Authors: Ayodeji Ajibola

Abstract: The paper investigates the relationship between corporate governance and organizational performance in Nigeria’s banking sector between 1996 and 2023, using the Tobin-Q valuation and operating performance methodology (quantitative characteristics) of variables in analyzing data collected from secondary sources. The internal mechanisms of corporate governance such as Returns on Assets (ROA), shareholder profit and Debt-Equity ratio had a negative impact on organizational performance. The study into forecast and long-term co-integration relationship between corporate governance mechanisms and organizational performance has shown that the enhancement of organizational performance by corporate governance mechanisms is likely to experience a steady increase after 2023.

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DOI: 10.3897/brics-econ.6.e128607

Authors: Imran Ali, Vladislav Gusev, Linara Khadimullina

Abstract: Economic landscape of Pakistan is determined by an extremely complex interaction of domestic and global forces; navigating it successfully requires a clear understanding of its character. The paper explores the dynamic relationships between macroeconomic variables and GDP growth in Pakistan using the Autoregressive Distributed Lag (ARDL) model and other stability tests using time series data from 1980 to 2022. The analysis includes variables representing GDP per capita, inflation, imports, total debt as a percentage of GDP, total population, and forestry and agricultural output. The correlation matrix shows a positive association between GDP growth rate and GDP per capita, total debt service is inversely correlated with total population, and GDP demonstrates a significant negative correlation. The ARDL results indicate that GDP per capita and the agriculture and forestry sectors are significant drivers of economic growth. Over the period in question, inflation only marginally affected GDP growth showing how important it is to maintain price stability through effective policies. Imports provide short-term benefits by enhancing productivity through capital goods and technology inflows but they may pose long-term challenges due to trade imbalances. The influence of population growth appears to be ambivalent: in the short term it contributes to economic growth by increasing labor supply and consumption; in the long term, however, its effect may become detrimental owing to resource constraints. Public debt shows little influence in the short term but negatively impacts growth over time by increasing the fiscal burden of debt servicing. These findings suggest that to achieve long-term economic stability and growth, the country needs targeted policy interventions that should help it control inflation, manage the debt sustainably, optimize imports, and invest in agriculture, which is an important determinant of GDP growth. Future research should concentrate on sector-specific studies and the effects of political stability on economic growth in order to provide deeper insights contributing to Pakistan’s sustainable economic development.

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DOI: 10.3897/brics-econ.5.e120855

Authors: Gabila Nubong, Lerato Ntuli

Abstract: Foreign Direct Investment (FDI) in Southern Africa has been one of the drivers of infrastructure development and economic growth especially in sectors such as mining, agriculture, energy, information, and communications technology (ICT). However, although important economic and institutional reforms have been undertaken by some SADC countries to encourage the inflow of FDI--particularly in low-income countries in the region, the flow of FDI to SADC member states remains low and concentrated in few countries and sectors and is still largely attracted to natural resources sectors. This paper examines the institutions and infrastructure development in the promotion of FDI inflows into the SADC region. Institutions and infrastructure development typically have a positive effect on FDI inflows through their impact on the investment climate. The paper uses panel data econometric analysis with OLS and PCSE to ascertain the impact of governance institutions on FDI inflows into the region. The results obtained reveal that the quality of governance, together with the level of economic development, market size, and openness to trade with the external world play a critical role in attracting FDI into SADC countries. There is however a need to control rampant corruption and reduce the political instability common in some of the countries of the region.

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DOI: 10.3897/brics-econ.5.e133581

Authors: Nikolay Nenovsky, Gildas Bondi

Abstract: On 6 July 2024 in Niamey, the leaders of Mali, Burkina Faso and Niger signed the constitutive act of the Confederation of Sahel States, at the same time confirming the departure of these three countries from the Economic Community of West African States (ECOWAS). The new Confederation of the Sahel States has decided, among other things, to set up an investment bank and a stabilisation fund. It is therefore plausible that the confederation will soon adopt a common currency. This issue is of utmost importance for many countries so it is worthwhile to see how the proposed new currency will be guaranteed by the natural resources of the Alliance of Sahel States (AES). The aim of this article is to examine the theoretical foundations and practical aspects underlying the creation of a common currency based on natural resources within the AES.

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DOI: 10.3897/brics-econ.5.e129160

Authors: Vijimon Oorkolil

Abstract: “KosmosCoin: Redefining Global Finance through a New Reserve Currency Paradigm”. The concept of KosmosCoin as a global reserve currency presents a revolutionary approach to addressing the challenges and limitations of existing fiat currencies and cryptocurrencies. Unlike traditional currencies, KosmosCoin is backed by tangible assets such as land, population, and precious metals, providing inherent stability and value. This paper explores the unique selling points of KosmosCoin, including its potential to enhance economic stability, promote financial inclusion, and increase monetary sovereignty. By leveraging blockchain technology and decentralized governance models, KosmosCoin aims to create a transparent, efficient, and inclusive financial ecosystem. Key findings of this research indicate that KosmosCoin could significantly reduce transaction costs, improve liquidity, and facilitate global trade. However, practical implementation faces challenges related to scalability, security, privacy, and regulatory compliance. Despite these obstacles, the potential economic implications of KosmosCoin are profound, suggesting a promising avenue for reshaping the global financial landscape. This paper concludes that with collaborative efforts and strategic planning, KosmosCoin has the potential to become a viable and transformative global reserve currency.

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DOI: 10.3897/brics-econ.5.e126783

Authors: Lukmon Oderinde, Gbenga Sanusi, Ojo Adelakun, Matthew Agbawn

Abstract: There is a wide consensus about the role of economic policy in attaining macroeconomic goals of high employment, price stability, and rapid economic growth. It is not clear, however, to what extent the monetary instruments can contribute to the development of self-owned enterprises. Monetary policy is one of the major policy tools for promoting business and investment once it is geared towards reducing unemployment. This study aims to assess the effect of monetary policy on self-owned enterprises in a developing economy, such as Nigeria. Based on the modern monetary theory which offers an alternative way of reaching full employment and price stability, the authors employ Toda-Yamamato-Dolado-Lutkepohl causality test to carry out an empirical analysis of the quarterly data for the period between 1991 and 2022. The effects of changes in the broad money and lending rates are similar. A unit broad money-related shock leads to little or no change in self-employment and there is a quick convergence to equilibrium. The paper provides robust empirical evidence revealing the effects of the two key monetary policy variables on self-owned business in a developing economy. For policy purposes it is important to point out that monetary policy does not directly affect self-owned businesses in Nigeria. It is concluded that monetary policy will be more effective in promoting self-owned businesses if there are special funds and lending rates for the small-scale businesses.

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DOI: 10.3897/brics-econ.5.e117948

Authors: Mduduzi Biyase, Frederich Kirsten, Talent Zwane, Santos Bila

Abstract: In light of environmental challenges, the BRICS countries have stepped to the forefront of economic progress versus environmental sustainability debate. Not only has energy consumption increased rapidly in these countries, but the economic progress and urbanization, mainly driven by intensive fossil fuel production, have also led to higher levels of income inequality. The dynamics of the interplay between economic growth, urbanization, and income inequality on the one hand and environmental sustainability on the other have yet to be fully understood in the BRICS context. This paper aims to contribute to the ongoing debate by assessing a combination of three Environmental Kuznets Curves (EKC) based on the GDPpc-emissions nexus, the income inequality- emissions nexus, and the urbanization-emissions nexus. Using the Autoregressive Distributed Lag (ADRL) and Panel Fully Modified Least Squares (FMOLS) models, we find an inverted U-shape EKC between GDP and carbon emissions, an inverted U-shaped EKC between income inequality and carbon emissions, and a U-shaped EKC between urbanization and carbon emissions. The inverted EKC between GDPpc and carbon emissions suggests that in the long run sustainable carbon reduction is possible alongside economic growth, but urbanization’s U-shaped impact on emissions might hinder this. Moreover, the inverted U-shaped relationship between income inequality and carbon emissions indicates a potential long-run trade-off between reducing both inequality and carbon emissions. Factors behind this relationship may vary significantly and include institutions- and country-specific factors, yet policymakers in the BRICS countries will do well attempting to better understand the dynamics behind urbanization and inequality as it will enable them to adopt more effective holistic policies aiming to improve energy efficiency, reduce fossil fuel dependence, and build economic systems contributing to faster economic growth, lower inequality and greater environmental sustainability.

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DOI: 10.3897/brics-econ.4.e98255

Authors: Petr Mozias

Abstract: The approach of development economics has been rarely used in the studies on the BRICS research agenda. This article is an attempt to fill this gap. According to development economics, the appearance of the BRICS association is fully justifiable, because large emerging economies have much in common. Russia is the most advanced country among the BRICS, even though some years ago it fell into the group of laggards in terms of economic growth, together with Brazil and South Africa. It may be partly explained by those countries’ adherence to neoclassical recipes of economic policy. It is believed, however, that national economic interests of all the five countries could be more effectively served by a combination of further pro-market reforms with public interventions to correct the inevitable market failures. That is why, for the Russian comparative advantages to be fully realized, the country should rely not so much on trade liberalization as on coordination among the BRICS governments in their actions aimed at trade and investment promotion.

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DOI: 10.3897/brics-econ.4.e99448

Authors: Carlos Eduardo Carvalho, Tatiana Massaroli de Melo, William Daldegan

Abstract: The Brazilian economy has more continuity than ruptures in the end of the pandemic as well over former Bolsonaro’s government closure. Positive economic indicators since 2021 were followed by a further slowdown at the end of 2022, keeping the pattern of weak growth moments in the midst of a near stagnation trend. The export of goods based on natural resources remains a positive factor as in the previous decades, though with the same problems of low leverage capacity of productivity diffusion to other sectors. The public sector faces great difficulties when trying to promote growth and modernization because of fiscal rigidity aggravated by mandatory expenses and varied resistance to cutting spending and redirecting expenses caused by conflicts that are hard to coordinate. After a brief presentation of the economic indicators at the end of 2022, the paper highlights three elements that condition the economic policy in the post-Covid Brazil: the rigidity of fiscal framework; export industry performance and deindustrialization; resumption of the foreign policy that will allow the country to benefit from the international scenario.

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DOI: 10.3897/brics-econ.3.e84676

Authors: Dipak Chaudhari, Pushpa Trivedi

Abstract: Central bank intervention plays a major role in managing exchange rate volatility. In comparison to advanced economies, emerging market economies are generally active in the forex market as excessive volatility of the local currency persists. The BRICS countries (Brazil, Russia, India, China and South Africa) are the major emerging economies influencing the international financial system. The paper empirically investigates the efficacy of central bank intervention in the case of the BRICS countries. It has been observed that intervention generally did not impact the exchange rate level; however, it reduced the volatility of the exchange rate. Furthermore, interventions in spot and derivatives markets are equally effective in containing exchange rate volatility, except in South Africa. It has been identified that sovereign yield spread impacts the exchange rate returns in China and South Africa and impacts the volatility in the returns in Brazil and Russia.

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DOI: 10.3897/brics-econ.3.e96300

Authors: Bruno De Conti, Antônio Carlos Diegues

Abstract: This article aims to analyze the economic integration of the BRICS countries through foreign direct investments (FDI) since the first summit of the group in 2009. The investigation shows that this integration is very asymmetric due to the preponderance of Chinese investments in other BRICS countries. Hence, the paper sets an associated objective, focusing on the evaluation of diverse patterns of internationalization of Chinese capital and its impact on the investments within the bloc. In line with these goals, the paper’s methodology involves several progressive steps. First of all, we are developing a data analysis of FDI in BRICS. Given the absolute dominance of China’s investments within the bloc, we are shifting the focus to these Chinese outward foreign direct investments (OFDI). In order to cope with this requirement, we are promoting qualitative and quantitative analysis. The qualitative analysis consists in the perception of heterogenous motivations that induce the internationalization of Chinese capital through examining the strategies of three groups of economic agents in China: (1) state-owned enterprises (SOE) operating in traditional sectors, (2) big companies preponderantly oriented on the domestic market, and (3) technology-based companies. The quantitative analysis lies in the scrutiny of the available data on Chinese investments in other BRICS countries. As a result, the main contribution of this article lies in the characterization of heterogeneous strategies of the internationalization of Chinese capital and their analysis within the framework of the asymmetric productive integration within BRICS.

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DOI: 10.3897/brics-econ.3.e86001

Authors: Andrei Panibratov, Julia Fedoritenko, Darya Dubova, Dmitriy Seleznev

Abstract: The article sheds light on the national climate policies under the influence of the EU “green” agenda towards a new wave of deglobalization. We address issues related to the main provisions of the carbon dioxide (СО2) emission trading system implemented by the EU and posit that European climate policy can enhance the process of reducing interdependence and integration between EU member states and non-EU countries. We suggest that the EU’s global climate leadership, increased use of environmental taxes and stimulation of economic growth based on low-carbon technologies such as hydrogen, energy storage and carbon capture, utilization, and storage (CCUS) can lead to deglobalization. Based on a case study of Finland as an EU member and China as a BRICS representative, we observe the effect of the applied carbon tax on the development of national economies and propose that similar policies across the EU and around the world minimize the risks of deglobalization.

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