Brazil, Russia, India, China, And South Economies Research Articles

The mediating role of green energy and environmental policies in sustainable development for BRICS economies: A tripartite impact of entrepreneurial activities, urban development and economic growth on ecological footprint

AbstractRecently, the globe has been facing several challenges, and environmental deterioration has become more prominent. Therefore, to deal with such environmental issues, the globe has tried to introduce several green initiatives via the Kyoto Protocol, the Paris Agreement, and the Sustainable Development Goals, but the problem remains intact. However, practitioners have no more choice but to exclude emerging economies from this race. For instance, to understand the response of emerging economies toward a sustainable environment, this study considers BRICS (Brazil, Russia, India, China and South Africa) economies. Similarly, the current empirical study utilizes innovative environmental determinants such as real income, urbanization, entrepreneurial activities, per capita renewable energy, financial innovation and environmental policy for selected regions from 2000 to 2021. However, the findings of the advanced estimators' series show the significant contribution of per capita green energy consumption, environmental policy and entrepreneurial activities toward environmental sustainability. In contrast, income, financial inclusion and urbanization contribute to environmental damage. Because of green energy supportive behavior, this study makes an additional step to investigate the mediating effect on financial inclusion, environmental policy and entrepreneurship. However, the mediating effect only supports environmental policy and entrepreneurship activities to reduce environmental pressure. From the policy perspective, the specified economies should allocate their financial resources to clean & green projects to attain the desired level of sustainability.

Revisiting the nexus between digital trade, green technological innovation, and environmental sustainability in BRICS economies.

After the UN Climate Action Summit in 2019, many countries started progressing towards race to zero targets. The intricate framework of digitalization and green technologies has the potential to persuade governments to implement policies that promote a zero-carbon economy, i.e., green economy. Hence, this study determines the effect of digital trade (DGT) and green technological innovation (GTI) on environmental sustainability (ENS) by considering the role of renewable energy consumption (REC), globalization (GLOB), and economic growth (EG). The study measured ENS by taking into account three proxy variables, i.e., ecological footprint (EF), carbon dioxide emission (CO2e), and methane emissions (CH4e). POLS and PMG-ARDL techniques are applied to the panel data of BRICS (Brazil, Russia, India, China, and South Africa) from 2000 to 2019. Panel Quantile Regression (PQR) along with AMG and CCEMG estimators is applied hereafter for checking the robustness of the empirical results. The long-run empirical outcomes show the positive association of DGT, GTI, REC, and GLOB with ENS. Lastly, this study inscribed the Environmental Kuznets Curve (EKC) and highlights policy implications and governmental measures to ensure environmental sustainability in BRICS economies.

The Long Run Impact of Exchange Rate and Inflation on GDP: A Panel Data Approach Consistent with Data from Brazil, Russia, India, China, And South Africa (BRICS)

The study seeks to address current discrepancies, providing valuable knowledge for decision-makers, fostering economic stability and expansion, informing global economic trends, assisting in business risk mitigation, and contributing to academic advancement through methodological innovation, with a focus on the changing nature of global economic dynamics. The purpose of this study is to assess how inflation and currency exchange rates affect the GDPs of the BRICS (Brazil, Russia, India, China, and South Africa) nations between 1998 and 2022 We employed a fixed-effect panel data model using EViews software to conduct a thorough regression analysis on the influence of exchange rates and inflation on the Gross Domestic Product (GDP) of the BRICS nations. The World Development Indicators website provides data that shows that, in contrast to predictions, exchange rates have no appreciable impact on GDP. Nonetheless, during the given time frame, inflation turns out to be a noteworthy and positively connected element impacting these countries' economic growth. This research contributes to the current understanding by uncovering the complex interconnections between exchange rates, inflation, and GDP in BRICS economies. Our findings highlight the necessity of customized economic strategies that recognise the distinct functions of inflation and currency rates in influencing the long-term growth patterns of individual countries.

Economic integration and stock market linkages: evidence from South Africa and BRIC

PurposeThis study examines the impact of regional economic integration (REI) on stock market linkages in the BRICS (Brazil, Russia, India, China and South Africa) economic bloc. In this type of study, the BRICS framework is an appealing empirical case, given its uncommon characteristics. For example, BRICS member states come from remote geographic locations (Africa, Asia, Europe and South America) and have contrasting socioeconomic profiles.Design/methodology/approachAn empirical design is framed from the perspective of bilateral trade between South Africa and BRIC. The author accepts trade intensity as a proxy of regional economic integration and then examines the resulting effect on the stock market co-movement within BRIC. The study applies a two-step econometric procedure of the BEKK-MGARCH and panel data models.FindingsOverall, bilateral trade, as a proxy of economic inwctegration, is associated with an increase in stock market integration. This positive relationship is particularly observed during episodes of surplus trade, and more interestingly, was initiated three years after BRICS’ existence and continues to grow at an increasing rate.Practical implicationsThe study outcome should benefit international trade practitioners and global investors interested in portfolio diversification or concerned with risk spillovers.Originality/valueFirst, notwithstanding South Africa's significant economic presence in the African continent, to the best of the author’s knowledge, this is the first study to empirically evaluate the BRICS economic integration on their stock market linkages from the perspective of South Africa. The value of this contribution is that further work may investigate the bidirectional spillover impact conveyed by South Africa's trade interactions within the juxtaposition of Africa and BRICS economies. Second, given that research on REI and stock market integration has historically concentrated on mature regional blocs of Europe, Asia, South and North America, the current study advances knowledge while correcting the prevailing literature imbalance.

Agricultural productivity‐environmental sustainability nexus through the lens of digitalization and energy intensity in BRICS countries

AbstractThe agricultural sector holds paramount implications in the economies of BRICS (Brazil, Russia, India, China, and South Africa) countries. Nevertheless, the escalating effect of climate change shows a significant and alarming threat to the actual environmental conditions required to sustain agricultural production. This study examines the potential contribution of demographic dividends, digitalization, and energy intensity in facilitating the attainment of environmental sustainability and agricultural productivity by BRICS economies from 1996 to 2020. The study first tested cross‐sectional dependence, then unit roots, cointegration, and long‐run elasticities using suitable econometric approaches to explore possible links between the study variables. The empirical results from the long‐run estimators stated that digitalization improves agricultural production and the environment; contrarily, demographic dividend and energy intensity contribute to environmental degradation. Furthermore, the long‐term improvement of agricultural production is supported by demographic dividend, GDP per capita, energy intensity, and digitalization. Also, the study reached a broad inference emphasizing bidirectional causal associations between demographic dividend, energy intensity, GDP per capita, the environment, and agricultural production. In conclusion, the study has identified robust policy options for BRICS economies that can serve as valuable guidance for policymakers in making informed decisions and implementing effective practices.

Impact of natural resources and technology on economic development and sustainable environment – Analysis of resources-energy-growth-environment linkages in BRICS

To examine the effects of technological advancements and natural resources in the energy-growth-environment nexus for a panel of BRICS (Brazil, Russia, India, China, and South Africa) economies over 1990–2022, we use the extended STIRPAT “(stochastic impact of regression on population, affluence, and technology)” model. Results obtained using the “Augmented Mean Group (AMG) and Fully Modified-Least Square (FM-LS) panel algorithms” show that technological advancements may lower CO2 emissions and boost economic development in the BRICS nations. Our calculations also confirm the classic “environmental Kuznets curve (EKC)” for the BRICS and, to a lesser extent, for other nations, and they support energy push emissions. Additionally, the empirical findings point to a one-way causal relationship between income and CO2; however, a two-way causal relationship between revenue and energy consumption and between the energy use and emissions of CO2in the BRICS and individual countries is also functional. The findings show that to attain energy security and a sustainable environment; governments may consider the role of innovations as a green supply of technology.

Understanding the Relationship Between Foreign Direct Investment and Economic Growth in BRICS: Panel ARDL Approach

Foreign direct investment (FDI) has gained prominence in international economics over the past three decades. Primarily, the belief that FDI influences economic growth of the host country, set the stage for the empirical research focused on the FDI–growth nexus. The growth literature, however, reveals mixed evidence regarding the role of FDI in promoting growth. Despite the conflicting evidence, developed and developing economies have attached immense economic and political importance to FDI. It is noteworthy that BRICS (Brazil, Russia, India, China and South Africa) economies are representative developing economies and have emerged as significant FDI destinations, having witnessed an immense surge in inward FDI over the past few decades. It is against this backdrop that the present study attempts to assess the impact of FDI inflows and select macroeconomic variables, namely macroeconomic stability, human capital, financial development and trade openness (TO), on the economic growth of developing BRICS economies. The study examines both short-run and long-run relationships between FDI inflows, select macroeconomic variables and economic growth by employing the dynamic panel autoregressive distributed lag (ARDL) model, unlike most of the previous studies. For this study, secondary data covering a reference period of 32 years (1987–2018) were used. The data on GDP growth (GDPG), FDI inflows, inflation (INF), human capital, private sector bank credit (proxy for financial development) and TO have been collected from the World Investment Reports published annually by United Nations Conference on Trade and Development (UNCTAD) and World Bank (World Development Indicators). The findings revealed a long-run cointegration among FDI, host country characteristics (TO, human capital, financial development and macroeconomic stability) and economic growth in BRICS.

Designing an Econometric Model on the Impact of Tax Burden on Investment Freedom and Sustainable Development of BRICS Countries

Foreign direct investments represent an important financial resource, which if directed correctly can constitute important elements in the sustainable development of the world's economies. Therefore, national economies have engaged in a fierce struggle to attract them, trying to build an environment as favorable as possible for investors, guaranteeing them investment freedom in various key sectors of the economy. The aim of the research is to analyze the impact of the tax burden on the investment freedom and sustainable development of the BRICS (Brazil, Russia, India, China and South Africa) emerging economies. The research explores the relationship between fiscal burden, investment freedom and sustainable development, and the potential implications for the economic growth and social well-being of the BRICS economies. The research study consists in the design of an econometric model to evaluate the determinants of investment freedom and sustainable development of the BRICS economies in relation to the fiscal burden.

Recent scenario and nexus between natural resource dependence, energy use and pollution cycles in BRICS region: Does the mediating role of human capital exist?

One of the most distressing global problems in this era is climate change caused by greenhouse gas (GHG) emissions. This global issue affects both developed and emerging economies. The alarming news is that much of this problem is materializing due to manufactured actions, strongly linked to an economy's productive sector that has been expanding incessantly in recent years. This event has led to an increase in energy consumption, especially in BRICS (Brazil, Russia, India, China, and South Africa) territories, which are rich in natural resources and production capabilities. Energy consumption-led pollution is burgeoning even after these nations' eye-catching progress in human capital. Thus, the present study aims to determine whether natural resource rent (NRR), energy use, and human capital (HC) matter in restoring environmental quality in BRICS economies from 1990 to 2018. The study's findings based on the panel quantile regression delineate that economic growth and non-renewable energy usage surge GHG emissions across all quantiles. Contrarily, renewable energy reduces emissions and restores environmental sustainability. The authors note heterogeneous effects of natural resource rent on GHG emissions (i.e., a significant positive relationship in the lower quantiles (10th to 40th) and a negative relationship in the upper quantiles (70th to 90th). Furthermore, human capital appears to help lower GHG emissions. Notably, human capital significantly supports mediating the negative environmental externalities from natural resource rent (i.e., the interaction term of LNRR*LHC is negative across all quantiles) in the BRICS economies. Thus, BRICS territories can benefit more by investing in human capital development and adopting mining principles that are scientific and help restore biocapacity surplus with less environmental costs. Phase-by-phase decoupling is also recommended for these nations through more dependence on renewables. Further policies have been discussed in the ultimate section.

Investigating the Determinants of Financial Inclusion in BRICS Economies: Panel Data Analysis Using Fixed-Effect and Cross-Section Random Effect

The current research empirically analyses the determinants of financial inclusion (FI) for BRICS (Brazil, Russia, India, China and South Africa) nations using the no. of depositors and Automated Teller Machines/user as dependent variables, a proxy for FI from 2004 to 2019. The study employs fixed-effect, cross-section random-effect and simple panel least square techniques to determine FI for different BRICS countries. The empirical findings of fixed effect and cross-section random highlight that population and internet users affirmatively and significantly influence FI. Simple panel least square analysis indicates that domestic credit to the finance sector, population, internet users and bank branches positively influence the no. of depositors in these economies. Gross domestic product (GDP) and domestic credit to private sector (DCPS) inversely affected FI. Results of the second measure of FI (ATM per user) show the exchange rate of domestic credit to the private sector, and GDP positively influences FI. These findings will induce policymakers to take corrective actions by considering the significant factors to boost FI in respective BRICS economies.

The impact of the COVID-19 outbreak on the connectedness of the BRICS’s term structure

This study aims to examine the impact of the different waves of the COVID-19 pandemic on the connectedness of the BRICS (Brazil, Russia, India, China, and South Africa) term structure of interest rates and its components (level, slope and curvature). For that purpose, this research applies the time-varying parameter vector autoregression (TVP-VAR) approach in order to assess the direction of spillovers among countries and factors and measure their contribution to the connectedness system. Our results show that the total connectedness measure changes over time, and the level and curvature components show connectedness that persists longer than the slope component, both in the first wave of the COVID-19 pandemic. Brazil and South Africa would appear as net transmitters of shocks, whereas China and India are net receivers. Finally, the most significant differences in the net dynamic connectedness between transmitters and receivers were focused on before and during the first wave of the COVID-19 pandemic crisis. Some additional impacts were observed during the last waves of the coronavirus pandemic. To our best knowledge, this is the first study on the connectedness between the yield curves of the BRICS economies and the COVID-19 crisis uncertainty according to the coronavirus MCI, by decomposing the yield curve into its factors (level, slope, and curvature).

Green innovation-green growth nexus in BRICS: Does financial globalization matter?

Green growth is a novel theme, gaining prominence in the current era. Therefore, this study investigates the impact of green innovation and financial globalisation on green growth in the BRICS (Brazil, Russia, India, China and South Africa) economies. The study employs the CS-ARDL model for the analysis. The findings confirm that the long-run estimates of environmental innovations and patents are positively significant, ensuring that environment-related technologies are helpful in attaining green growth in the BRICS economies. Moreover, the estimates of financial globalisation are significantly positive, suggesting that a rise in financial globalisation leads to an increase in green growth in the BRICS economies. Our findings imply that, to promote green growth in the BRICS economies, policymakers should focus on R&D activities that can encourage the development of green innovations.

Frequency dependence between oil futures and international stock markets and the role of gold, bonds, and uncertainty indices: Evidence from partial and multivariate wavelet approaches

This paper examines the frequency dynamic co-movements between crude oil prices and stock market returns of three developed economies (Canada, Japan, and the USA) and the emerging BRICS (Brazil, Russia, India, China, and South Africa) economies by considering four global factors (U.S. treasury bills, S&P volatility index, gold price, and U.S. EPU index). Using bivariate and multivariate wavelet approaches, the results show evidence of time-frequency co-movements between the considered markets at medium and low frequencies. Besides, the results reveal that the co-movement is intensified during global financial crisis and COVID-19 pandemic periods, confirming recoupling hypothesis. The risk analysis reveals dependence and persistence of co-movements, and aggravation of portfolio risk in the BRICS economies and across markets during bouts of afflictions. These findings should encourage the relevant national and transnational policy makers to consider these co-movements which vary over time and in duration when setting up regulations that deem to enhance the market efficiency.

Testing volatility and relationship among BRICS stock market returns

BRICS economies are important in recent times because the economic growth rates will be higher than the growth rates of G-6 economies in the near future. But the year 2020 has smashed up this tendency due to volatile stock markets of BRICS economies. A detailed examination of the BRICS stock market to determine volatility and relationships since the crisis of 2020 is hardly available in the available research. With this in mind, an attempt has been made to track the stock market's volatility and relationship among the BRICS (Brazil, Russia, India, China, and South Africa) stock market return based on the daily for the period from November 18, 2019 to May 7, 2021. This study deals with the statistical test of GARCH family model and ARDL model. GARCH model shows that the stock market of Russia and India are volatile. The EGARCH model demonstrates that leverage effect exists only in the Indian stock market. ARDL test validates a long-run relationship of the stock market of Russia with China and of the Indian stock market with South Africa. ARDL test also shows a short-run relationship running from the Brazil stock market to the other select stock market, from the Indian stock market to the stock markets of Brazil and South Africa, and from the South African stock market to the Indian stock market. So it can finally be said that investors under the BRICS stock markets should design adequate measures to protect their investments by executing appropriate hedging plan.

Are emerging economies’ credit cycles synchronized? Fresh evidence from time–frequency analysis

PurposeTo the best of our knowledge, no study has examined credit cycle synchronizations in the context of emerging economies. Studying the credit cycles synchronization across BRICS (Brazil, Russia, India, China and South Africa) countries is crucial given the magnitude of trade and financial integration among member counties. The enormity of the trade and financial linkages among BRICS countries and growth spillovers from emerging economies to advanced and low-income countries provide the rationale and motivation to study the synchronization of credit cycles across BRICS.Design/methodology/approachThe study investigates the credit cycles coherence across BRICS economies from 1996Q2 to 2020Q4. The synchronization analysis is done using the noval wavelet approach. The analysis examines not only the coherence but also the extent of credit cycle synchronization that varies across frequencies and over time among different pairs of nations.FindingsThe authors find heterogeneity in the credit cycles' synchronization among the member nations. China and India are very much in sync with the other BRICS countries. China's high-frequency credit cycle mostly leads the other countries' credit cycles before the global financial crisis and shows a mix of lead/lag relationships post-financial crisis. Interestingly, most of the time, India's low-frequency credit cycles lead the member countries' credit cycles, and Brazil's low frequency credit cycle lag behind the other BRICS countries' credit cycles, except for Russia. The results are crucial from the macroprudential policymaker's perspective.Research limitations/implicationsThe empirical design is applicable to a similar set of countries and may not directly fit each emerging economy.Practical implicationsThe findings will help understand the marked deepening of trade, technology, investment and financial interdependence across the world. BRICS acronym requires no introduction, but such analysis may help understand the interaction at the monetary policy level.Originality/valueThis is the first study that highlights the need to understand the credit variable interactions for BRICS nations.

Dynamic influence of aging, industrial innovations, and ICT on tourism development and renewable energy consumption in BRICS economies

Given the rise in population ageing and urbanization, the BRICS (Brazil, Russia, India, China, and South Africa) economies are stressed about dealing with the climate change process and ascertaining the energy crisis. To diffuse the technological innovations and curtail natural resource extraction, with an objective of green tourism development, the transition towards renewable energy sector, the policy framework in the BRICS countries needs a reorientation, which is the study's primary aim. The study proposes a novel policy framework for BRICS economies by exploring the role of ageing, information, communication, and technology (ICT), and industrial innovations on tourism and renewable energy between 2000 and 2017. By exercising the second-generation econometric approaches, the impact of industrial innovations, natural resources, economic growth, and ICT on tourism is positive, while the role of ageing on tourism is negative. Similarly, industrial innovations, economic growth, and ageing are positive determinants of renewable energy, while ICT and natural resources are negative determinants. The causal results supported bidirectional links between ageing, tourism, ICT and tourism, while economic growth unidirectionally causing tourism. Similarly, industrial innovation, ICT, and natural resources are simultaneously unilaterally causing renewable energy in BRICS economies. The results obtained from the current study are unique, based on which we have discussed policy proposals for theory and practice.

Causal Linkage between Remittances and Financial Development: Evidence from the BRICS (Brazil, Russia, India, China, and South Africa)

The steady flow of remittances due to financial integration has grabbed the attention of academicians and policy advisors. Despite the growing importance of remittances, the study on the relationship between remittances and financial development in Brazil, Russia, India, China, and South Africa remains unexplored. Thus, this paper analyses the effect of remittances on financial development. It also investigates the long-run and short-run relationship between remittances and financial development using annual data of Brazil, Russia, India, China, and South Africa from 1990 to 2019. Three different financial development indicators are used: domestic credit to the private sector as a percentage of GDP, bank deposit as a percentage of GDP, liquid liabilities as a percentage of GDP. The study employs the fixed and random effect model, Johansen Cointegration tests, vector error correction model, and Wald tests for analysis. The results suggest a positive effect of remittances on bank deposits. It indicates that a 1% increase in remittances leads to a 4.5% increase in bank deposits. The study also reveals the long-run relationship between remittances and bank deposits and the absence of a short-run relationship between remittances and financial development. The main implications of the study can be predicted as remittances allow the accumulation of savings in the long run and provide the platform for the unbanked recipients to utilize certain financial products and services. The absence of a short-run relationship indicates that remittances are utilized mainly for consumption in the short run. However, it can be recommended that BRICS economies should make every effort to increase the remittance inflows through reduced transaction costs and tax benefits in remittance-led investment or banks to bank deposits with competitive deposit rates for the diaspora.

An empirical investigation of N-11 countries as successors of BRICS using panel data modeling

PurposeFor more than four decades, persistent economic activities and a focused growth strategy resulted in significant infrastructural and other favorable economic and institutional changes in the world's developing nations. High-quality growth is not just a function of sound economic policies but also implementing a broad range of social policies. The BRICS (Brazil, Russia, India, China and South Africa) nations have proven their testimony on both these factors. Following their path are some other emerging economies like N-11 (or Next Eleven propounded by Goldman Sachs (2005) Report), which this present study tries to examine as successors of BRICS.Design/methodology/approachAlong with panel data regression modelling, the study has applied econometric procedures robust to heterogeneities across various nations and have been able to produce more reliable results that can be generalized for other similar groups of countries. 11 independent variables (both economic and institutional) have been used to meet the study's objective for a period of 34 years (1985–2018).FindingsThe findings of the study reveal that the governments of both the group of countries must work toward their macro-economic stability factors (external debt stocks), technological capabilities (mobile and fixed broadband subscriptions), human capital (health expenditure) and political conditions (mainly the rule of law) to enhance their sustainable economic growth.Research limitations/implicationsThis study enhances knowledge of the determinants of economic growth in emerging countries. Firms from BRICS and N-11 may better understand the factors influencing their internationalization process (both economic and institutional). The study is significant not just for the researchers but also for the policymakers of the BRICS and N-11 to understand in which areas their country is leading or lagging. The study is useful even for the policymakers of other emerging countries of the world who might take lessons from these nations (especially BRICS) and follow their success path. This study helps the governments of other groups of emerging countries such as PIN (Pakistan, Indonesia and Nigeria); MINT (Mexico, Indonesia, Nigeria and Turkey); CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), etc. which can follow the path of BRICS economies in growth and formulate policies to increase their economic growth accordingly. At the enterprise level, it helps MNCs understand BRICS and N-11 markets and formulating entry and growth strategies in these most emerging countries of the world.Originality/valueThe present study is unique. It tries to investigate the projections of the Goldman Sachs report after 15 years of its release. It tries to determine the factors responsible for the economic development in the N-11 countries with advanced econometric techniques. Majorly, the focus is to comparatively analyze the growth trajectory for BRICS and N-11 nations and suggest whether N-11 has the potential to become successors of BRICS. A concentrated effort to examine the most significant drivers (both economic and institutional), which may lead to economic progression, has been made in this study.

Energy mix outlook and the EKC hypothesis in BRICS countries: a perspective of economic freedom vs. economic growth.

This study attempts to unveil an additional dimension to economic freedom within the framework of the environmental Kuznet curve (EKC) hypothesis using the panel data for BRICS (Brazil, Russia, India, China, and South Africa) economies over the period 1995-2018. Firstly, the study found that the EKC hypothesis is valid only in the long run for the panel countries. Secondly, we found that economic freedom mimics the pattern of economic output. Thus, when economic freedom is employed in lieu of economic growth, the EKC hypothesis is also validated only in the long run. Importantly, when both economic freedom and output are employed alongside, they produce the same carbon mitigation effect in each of the short-run and long-run periods. Thirdly, the country-specific evidence of the role of economic freedom and output in environmental quality is not less of a U-shaped relationship in the short run. Lastly, the impact of the bloc's energy mix (coal, natural gas, and oil energy utilization) on environmental quality is undesirable in both the short and long run; only in South Africa natural gas has the potential to mitigate carbon emissions. Overall, the study offers relevant policy measures for attaining Sustainable Development Goals (SDGs) target to combat climate change and its impacts.

Further evidence on co-movement between equity funds and business cycle variables in BRICS: A Wavelet analysis

There is only a limited amount of research that addresses questions pertaining to the relationship between the asset management sector and the economy. This paper focuses on this relationship and addresses the question of whether the asset management sector provides information about future economic conditions. The study examines the co-movement between equity mutual funds and business cycle variables in the BRICS (Brazil, Russia, India, China and South Africa) economies over the period of 2000–2019. Using daily data of 9005 active asset management firms, the study utilizes Wavelets at multiple time horizons (Multiresolution) and Granger coherence approaches. Our findings suggest that equity funds lead against key macroeconomic variables including credit default swap spread, Treasury bill and exchange rate for most of the sample countries (Russia, China, and South Africa) and that interactions among variables are diverse in nature. The Granger coherence results are important for samples from India and China, where the long run constituents possess forecasting ability. In the case of both India and Brazil, the equity funds have a lagged relationship with credit default swap spread, Treasury bill and exchange rate. The findings underscore the importance of portfolio diversification and hedging strategies for market players and policymakers in order to avoid economic turmoil.