Title: The role of international trade and financial integration in the development model of the BRIC economies

Authors: Aleksandar Stojkov

Addresses: Department of Business Law and Economics, Iustinianus Primus Faculty of Law, Ss. Cyril and Methodius University, Skopje 1000, Republic of Macedonia

Abstract: This study aims at examining the role of the international trade and financial integration behind the impressive economic growth rates of the BRIC economies. It employs a Barro-type growth model encompassing several robust correlates of economic growth and alternative measures of international trade and financial openness. The estimation rests on a testing down procedure applied to a dynamic panel model based on four-year non-overlapping averages for 88 countries during the 1973-2008 period. The empirical results provide consistent evidence of growth-conducive effects of the international trade integration in addition to the conventional determinants. However, no statistically discernible effect on economic growth of the de facto measures of international financial integration is identified, lending support to the argument that the benefits may be indirect.

Keywords: international finance; trade openness; economic growth; international trade; financial integration; economic development; BRIC economies; Brazil; Russia; India; China.

DOI: 10.1504/IJEBR.2012.049529

International Journal of Economics and Business Research, 2012 Vol.4 No.6, pp.606 - 621

Published online: 25 Nov 2014 *

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