This paper attempts to apply the vine copulas methodology to assess the interdependence among the exchange rate market, equity indices, precious metals and energy resources within the selected BRICS economies. Using the ARFIMA-GJR-GARCH model, the residuals of the daily returns from foreign exchange rates, precious metals, equity indices, and energy prices of the BRICS economies for the period from January 1, 2003, to August 2023 were filtered. The empirical findings reveal a persistence of shocks and an asymmetric response to positive and negative news. Elevated volatility was observed across equity, precious metals, and energy markets, indicating substantial risks that necessitate robust risk management strategies. The results illustrate the heightened sensitivity of BRICS economies to external shocks, such as the Global Financial Crisis and the COVID-19 pandemic, which have triggered market volatility across currencies, stock market returns, and energy prices. This study emphasises the crucial importance of diversification, given the strong co-movement among asset classes, particularly during periods of extreme market volatility. Furthermore, the vine copulas analysis reveals intricate co-movements between assets, contributing to enhanced portfolio management strategies. Assets such as oil and gold serve as effective hedges. At the same time, foreign exchange rates play a significant role in investment decisions, underscoring the necessity for meticulous risk assessment and diversification strategies. These findings emphasize the vulnerability of BRICS economies to external shocks and highlight the imperative of effective risk management and diversification in navigating these dynamic markets. • ARFIMA-GJR-GARCH and C/D-vine copulas capture BRICS multi-asset dependence • C-vine fits Brazil, Russia, China; D-vine suits India and South Africa • Silver is central node; lower-tail dependence links silver with BRICS assets. • Oil and gold hedge; weak tau pairs provide diversification • Asymmetric tail risks stress need for volatility-aware BRICS risk management

Retraction Note: Eco-Innovation and Fiscal Decentralisation: Pathways to Reducing CO2 Emissions in BRICS Economies

In the context of global economic transformation and the growing role of emerging market countries, the BRICS group is often viewed as a monolithic actor capable of offering an alternative development model. However, the hypothesis of this study is that, despite shared geopolitical goals, the economic strategies of BRICS member countries diverge significantly under the influence of national fiscal and trade policy choices. To test this hypothesis, a cluster analysis method was used based on 15 indicators (mean values, standard deviation, and trend) for 22 countries. The results of the analysis confirmed the divergence hypothesis. The BRICS countries were divided into different clusters, reflecting fundamentally different development models. China and India were included in the cluster of dynamically growing economies with moderate tax burdens and trade liberalization policies. Meanwhile, Brazil and South Africa were classified as countries in the “middle-income trap”, characterized by high tax burdens, complex regulations, and, consequently, a large shadow economy (over 40% of GDP). Russia and South Africa, while high-income, exhibit high growth volatility due to dependence on commodity markets and institutional weaknesses. The clustering conducted in the study allowed us to identify the determinants of the BRICS countries’ inclusion in various strata of the global economic hierarchy. Development models largely depend on fiscal factors (tax and customs-tariff policies), which in turn influence the scale of the shadow economy and, ultimately, determine growth rates. Five fundamentally different patterns of economic growth were identified, refuting the hypothesis of a monolithic BRICS bloc. Cluster 0 demonstrates a “dynamic development” pattern – an export-oriented model with high investments in human capital, which ensures sustainable growth with a moderate shadow economy. Cluster 1 is characterized by a “protectionist stagnation” pattern: despite high customs barriers, weak fiscal institutions lead to the formation of a gigantic shadow sector, limiting the potential for sustainable growth. Cluster 2 represents a “middle-income trap” pattern, where excessive tax burdens suppress business activity, resulting in minimal growth rates and the scale of the shadow economy. Cluster 3 exhibits a “rent volatility” pattern: high per capita GDP is combined with growth instability due to dependence on commodity markets. Low tariffs and tax burdens do not compensate for institutional vulnerability, manifested in a moderately high level of shadow economy. Thus, the optimal model is a balance of taxation, trade openness, and investment in human capital, while protectionism, excessive tax burdens, and dependence on commodity markets contribute to slower growth. The study demonstrates that the key determinants of economic success and sustainability are not formal membership in an integration bloc, but specific national choices regarding tax and tariff policies. The effectiveness of these choices directly impacts the growth rate and scale of the shadow economy, determining a country’s place in the global economic hierarchy.

Purpose: This study aims to examine whether the integration of green finance and financial development serves as an effective mechanism for achieving sustainable industrial growth in BRICS economies. Method: The research employs a quantitative econometric approach using panel data for BRICS countries. Long-run relationships are estimated through Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Panel-Corrected Standard Errors (PCSE) models to account for heterogeneity and cross-sectional dependence. Findings: The results reveal a statistically significant and positive long-run relationship between green finance, financial development, and sustainable industrial growth. While individual effects may vary, the interaction between green finance and financial development demonstrates a strong synergistic impact. Empirical evidence suggests that this integration plays a substantial role in supporting industrial expansion, with effects particularly pronounced at lower levels of green finance development. Conclusion/Contribution: The study contributes to the literature by highlighting the importance of integrating green finance with financial development as a driver of sustainable industrialization in emerging economies. It provides empirical support for policy frameworks that enhance coordinated financial-environmental strategies, emphasizing the role of institutions such as the New Development Bank in strengthening South–South cooperation and supporting long-term sustainability goals.

Governance, Entrepreneurship, and the Path to Sustainable Development in BRICS Economies

Mineral resource rents and green innovation: A way forward for green innovation in BRICS economies

As global concerns about climate change intensify, understanding the determinants of Green Total Factor Productivity (GTFP) in emerging economies has become essential. This study examines the drivers of Green Total Factor Productivity (GTFP) in BRICS countries (Brazil, Russia, India, China, South Africa) from 2000 to 2022, focusing on institutional quality, climate policy stringency, energy consumption, human capital, and sectoral growth. Using the Pooled Mean Group-Autoregressive Distributed Lag (PMG-ARDL) model, supported by panel causality tests and robustness checks, the study reveals a positive long-term relationship between GDP and GTFP (coefficient = 0.67), with bidirectional causality. Institutional quality (elasticity = 0.42) and human capital (elasticity = 0.25) significantly enhance GTFP, while climate policy stringency initially reduces GTFP (–0.60) but becomes neutral over time. Sectoral contributions show that industry (0.18) and services (0.13) have the most significant impacts on GTFP. The study contributed to an integrated approach combining macroeconomic, institutional, and environmental factors. Policy implications emphasize the need for stronger institutions and energy efficiency. Future research should explore broader geographic contexts and micro-level dynamics to strengthen GTFP models.

Purpose The purpose of this study is to investigate whether achieving comprehensive ESG disclosure enhances firm value in emerging markets and whether the valuation relevance of ESG disclosure depends on credibility mechanisms, including Global Reporting Initiative (GRI) compliance, disclosure maturity, regulatory strength, materiality, disclosure intensity and third-party assurance. Design/methodology/approach This study constructs a GRI-based ESG disclosure measure and applies a staggered difference-in-differences design centered on each firm’s first attainment of a comprehensive ESG disclosure threshold from 2011 to 2021 in BRICS economies. This study also analyzes the role of GRI alignment and maturity, regulatory strength, disclosure intensity, materiality processes and third-party assurance. Findings The findings of this study suggest that firms reaching a comprehensive ESG disclosure threshold exhibit higher firm value in the post-adoption period. The valuation relevance of ESG disclosure is not uniform and becomes stronger when disclosure is more credible and comparable, particularly when aligned with GRI standards (and more mature GRI iterations) and when supported by stricter sustainability regulations, explicit materiality processes and external assurance. Practical implications Managers should focus on credible, decision-useful ESG reporting with aligned disclosure, clear materiality and assurance, rather than expanding the narrative alone. Investors should distinguish between the extent of disclosure and its credibility, and regulators can enhance market usefulness by integrating disclosure requirements with a credibility infrastructure. Social implications This study highlights the importance of robust regulatory frameworks and comprehensive ESG disclosure, which fosters corporate transparency and accountability. These efforts can yield broader societal benefits, including improved environmental sustainability and enhanced social well-being. Originality/value This study contributes by replacing third-party ESG ratings with a transparent, GRI-based comprehensive disclosure index and combining it with a staggered difference-in-difference threshold-attainment design to connect disclosure improvements to firm value. This study also demonstrates that valuation gains rely on credibility mechanisms (GRI maturity, materiality, assurance and regulatory strength) in emerging markets.

The growing global emphasis on sustainable production (SSP) and carbon reduction has intensified scrutiny of financial instruments as drivers of environmentally efficient industrial transformation. In essence, green credit policy (GCP) has emerged as a strategic mechanism for channeling capital toward low-carbon production. Therefore, this study examines its impact on SSP in Brazil, Russia, India, China, and South Africa over the period 2005–2024. The analysis captures both short- and long-run dynamics with verified robustness and causality, revealing that GCP is positively and statistically significantly associated with SSP in the long run. This finding indicates that climate-oriented financial instruments enhance carbon-efficient output through capital reallocation, technological upgrading, and institutional reinforcement. Robustness tests excluding China confirm that the findings are not driven by a single country. Overall, the results highlight the importance of integrating financial mechanisms into environmental policy design. This contributes to advancing Sustainable Development Goal (SDG) 12 by promoting cleaner and more sustainable industrial production. Policy implications suggest that governments strengthen climate-aligned credit frameworks, financial institutions expand green lending, and firms leverage green finance to accelerate low-carbon technological adoption. • Green credit policy significantly boosts sustainable production in BRICS economies. • CS-ARDL and FMOLS models confirm robust short- and long-run effects. • Financial depth, FDI, and governance strengthen GCP’s impact, while energy intensity and high lending rates constrain it. • Findings support Porter Hypothesis and Schumpeterian growth theory. • Provides cross-country evidence linking GCP to carbon-efficient production, guiding policy and finance strategies.

Growth dynamics and sustainability of BRICS economies under climate uncertainty

This study investigates the associations between economic growth, healthcare expenditure, environmental pollution, urbanization, trade openness, and life expectancy in BRICS economies from 2000 to 2024 using a distribution-sensitive panel framework. Quantile regression is applied to capture heterogeneity across different levels of life expectancy, supported by robustness checks using PCSE, DKSE, and F-GLS estimators, and validated through panel cointegration and dependence tests. The results show that healthcare expenditure is positively associated with life expectancy, while the relationships for economic growth and pollution are mixed and vary with development stage. Urbanization exhibits both supportive and adverse associations depending on infrastructure capacity and environmental pressure, and trade openness generally relates to lower life expectancy. These findings suggest that policy responses should be tailored rather than uniform across countries. Strengthening the efficiency of healthcare systems, coordinating industrial growth with pollution management, and adopting environmental and health safeguards in trade and urban policy can help BRICS governments align economic expansion with sustainable improvements in population well-being.

The growing complexity of climate change within the global economy motivates researchers to explore its impact on various economic dimensions. In this quest, the present study explores the influence of climate risk index (CRI) and climate policy uncertainty (CPU) on the banking stability of the BRICS economies. In addition, the study also explores the moderating role of banking regulation and supervision on the aforementioned relationship. In order to accomplish the above objectives, the study employs a robust set of econometric models on the alternative proxies of banking stability, that is, Z-score and nonperforming loans (NPLs). Furthermore, to assess the impact of the Paris Agreement on the previously discussed relationship, the study analyses the above relationship across three distinct timeframes, that is, the complete sample (2007–2021), the period preceding the Paris Accord (2007–2014) and the timeframe following the Paris Accord (2015–2021). The findings from the panel-corrected standard error (PCSE) estimate indicate that CRI and CPU exert a negative impact on the banking stability by increasing the proportion of NPLs and reducing the Z-scores. In terms of the interaction variables, the study demonstrates that when CRI interacts with CPU, it exacerbates the negative influence on the banking sector’s stability. Moreover, considering the moderating variables, the empirical analysis indicates that banking regulation and supervision moderate the negative impact of CRI on the banking stability. The study also explains that the repercussions of the climate risk on the banking stability are more pronounced following the post-Paris Accord period compared to the period preceding the Paris Accord. The estimates remain consistent across various alternative methodologies, that is, the system-generalized method of moments and the fixed effects model. The study offers useful insight to comprehend the impact of climate risk on the banking stability.

The global financial system is undergoing a period of increasing fragmentation as payment and settlement infrastructures become politicised and alternative systems emerge. Platforms such as SWIFT and Euroclear remain central to cross-border finance, yet their use in sanction enforcement has encouraged the development of parallel payment and settlement arrangements, particularly among BRICS economies. This paper examines the implications of global payment system fragmentation for Cyprus, a small open economy and euro-area financial centre. Rather than focusing on direct exclusion or adoption of alternative systems, the analysis highlights indirect transmission channels, including confidence effects, compliance costs, capital flow volatility, and reputational risk. A conceptual framework is developed to explain how infrastructure fragmentation affects rule-taking economies, followed by a scenario analysis illustrating potential outcomes under different fragmentation trajectories. The results suggest that even under managed coexistence, fragmentation increases operational complexity and regulatory pressures for small financial centres. More severe fragmentation scenarios could amplify funding risks and challenge financial intermediation models. The paper concludes with policy recommendations for Cyprus and the European Union, emphasising regulatory alignment, compliance capacity, and infrastructure governance as key tools for managing fragmentation-related risks.

This study examines the determinants of renewable energy consumption among BRICS countries (Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia, Iran, and Indonesia) between 2000 and 2022. Using static (Fixed and Random Effects) and dynamic (First-Difference GMM) panel data models, the research investigates how economic, institutional, and social factors influence renewable energy transition. The results reveal structural heterogeneity within the bloc. Among the founding members, renewable energy consumption is positively associated with governance quality and trade openness, while GDP per capita exhibits a negative relationship, consistent with the Environmental Kuznets Curve hypothesis. In contrast, the new members show strong energy dependence and limited institutional capacity, with dynamic models confirming high persistence in energy consumption and weak responsiveness to economic and policy changes. Variables such as education and life expectancy were omitted in the dynamic specification due to limited temporal variation, without compromising model consistency. Diagnostic tests (Hansen, Sargan, and AR(2)) confirm the robustness of the estimates. Overall, the findings highlight the importance of strengthening institutional governance, technological innovation, and intra-bloc cooperation to advance energy transition and achieve sustainable development across the BRICS economies.

This study examines the impact of financial development on economic growth in the BRICS countries, Brazil, Russia, India, China, and South Africa over the period 2000 to 2024. It aims to determine how financial development contributes to growth in these emerging economies, which play an increasingly influential role in the global financial system. Drawing on literature emphasising capital accumulation, innovation, and financial intermediation, the study focuses on gross fixed capital formation, employment-to-population ratio, research and development expenditure, and domestic credit to the private sector. Using a quantitative panel data approach with fixed and random effects regression models, the Hausman test identifies the fixed-effects specification as most suitable, accounting for country-specific institutional and structural characteristics. Results show that gross fixed capital formation and research and development expenditure significantly boost GDP growth, highlighting the importance of investment and innovation, whereas financial development exhibits an insignificant or negative effect, reflecting inefficiencies in credit allocation and weak transmission to productive investment. The study concludes that financial development alone is insufficient for growth; sustainable expansion requires effective regulation, good governance, inclusive financial systems, and deeper capital markets across BRICS economies.

ABSTRACT The reliance on natural resource rents is increasingly a factor that decisively influences the economic stability and sustainability of states, especially in the context of the expanded BRICS economies. The study investigates the drivers of resource dependence in these countries, focusing on FinTech, institutional quality, digitalization, and human capital. The current work analysis utilizes a balanced panel dataset from 1996 to 2023 and leverages the Method of Moments Quantile Regression (MMQR) to identify heterogeneous effects at different levels of natural resource dependence. Common Correlated Effects Mean Group (CCEMG) estimators and Augmented Mean Group (AMG) are used to test robustness, which shows that the results are consistent and in the right direction. The findings of the present study show that financial technology greatly alleviates resource dependence, particularly in countries with high natural resource intensity. Institutional quality also helps in decreasing dependence, though to a lesser extent, especially in non–resource‐dependent settings, whereas human capital exerts a negative but less robust impact. By contrast, digitalization is found to be positively related to resource rents, indicating that without green policy harmonization, in the short run at least, the expansion of digital technologies could prove to be more intense in terms of resource utilization. The paper's originality also consists in the interaction of distribution‐sensitive quantile regressions with second‐generation estimators under resource dependence conditions, providing new evidence on how structural technology components interact asymmetrically among BRICS+ economies.

Abstract This study examines the determinants of export sophistication across BRICS countries (Brazil, Russia, India, China, and South Africa) from 2000 to 2022. It focuses on the heterogeneous effects of macroeconomic variables economic growth (GDP), foreign direct investment (FDI), human capital, and research and development (R&D) as well as the impact of the COVID-19 pandemic on export sophistication. The study employs the cross-sectionally augmented autoregressive distributed lag (CS-ARDL) approach, which effectively captures cross-sectional dependence and slope heterogeneity, improving upon traditional panel estimation techniques. The empirical findings indicate that GDP growth, FDI inflows, human capital, and R&D expenditures positively influence export sophistication in BRICS economies, while the COVID-19 pandemic exerts a negative effect. These insights offer important policy implications for enhancing export quality and economic resilience in emerging markets.

ABSTRACT Climate change has evolved from an environmental concern into a strategic challenge, exposing firms to financial, operational, and reputational risks that threaten long‐term survival. Resilience to these risks, however, remains uneven, particularly in emerging economies where institutional diversity and regulatory gaps complicate adaptation. Although ESG strategies are increasingly promoted as tools for resilience, evidence of their effectiveness in heterogeneous contexts such as the BRICS economies remains limited. This study addresses this gap by examining how ESG strategies enhance corporate climate risk resilience (CRR) in BRICS, with a focus on the moderating role of sustainable governance and the mediating role of digital transformation. The analysis uses panel data from 641 listed manufacturing firms in BRICS economies between 2010 and 2023 and applies dynamic panel estimations, non‐linear modeling, and multi‐level analysis with robustness checks. The results show that ESG strategies significantly strengthen resilience, with environmental and social practices providing strong early gains but diminishing returns, while governance reforms generate slower yet compounding effects over time. Cross‐country analysis finds environmental strategies most influential in China, social initiatives strongest in South Africa, and governance reforms most effective in Russia, while industry‐level evidence highlights resilience gains in energy‐intensive and technology‐driven sectors. The study contributes by unpacking non‐linear ESG–resilience dynamics, clarifying the enabling roles of governance and digitalization, and extending ESG scholarship to underrepresented BRICS contexts. Policy recommendations emphasize tailoring ESG strategies to institutional and sectoral conditions, strengthening regulatory frameworks, and expanding digital and green finance infrastructure to accelerate sustainable and resilient business practices.

Environmental pollution, exacerbated by rising CO2 emissions and deteriorating air quality, presents significant challenges to sustainable development worldwide. This study investigates the factors influencing environmental pollution in Middle Eastern and BRICS countries from 1995 to 2020, employing various econometric methods, including CIPS and CADF unit root tests, the Westerlund panel cointegration test, and the Pairwise Dumitrescu–Hurlin panel causality test, along with robustness checks via DOLS. The results for BRICS nations indicate a unidirectional causality from renewable energy consumption to CO2 emissions, suggesting that increased renewable energy usage effectively lowers emissions, although CO2 emissions significantly affect energy consumption without reciprocal influence. In contrast, Middle Eastern countries reveal a bidirectional causality between renewable energy and CO2 emissions, indicating that increases in renewable energy not only mitigate emissions but also respond to emission level changes. Notably, energy consumption neither significantly influences CO2 emissions nor is affected by them in this region. In both regions, trade openness influences CO2 emissions unidirectionally, while FDI shows no significant predictive power for emissions levels. The DOLS results demonstrate that a unit increase in renewable energy reduces CO2 emissions by 0.22% in the Middle East and by 0.66% in BRICS countries, emphasizing the effectiveness of renewable energy investments in mitigating climate change. These findings underline the importance of developing policies that promote renewable energy while carefully examining the impacts of FDI and trade on emissions.

ABSTRACT As global industries confront escalating environmental pressures, translating corporate sustainability ambitions into measurable circular outcomes has become increasingly essential. This study investigates how firm‐level sustainability targets (FST) drive the adoption of circular business strategies (CBS) among manufacturing firms in BRICS countries, where rapid industrialization intersects with institutional diversity and sustainability constraints. Grounded in the resource‐based view and strategic fit theory, the study proposes an integrated framework in which eco‐innovation mediates, and sustainable governance moderates, the FST–CBS relationship. Using a panel dataset of 789 listed manufacturing firms from 2010 to 2023, the study applies a dynamic panel generalized method of moments (GMM) estimation with additional instrumental variables to address potential endogeneity and enhance the robustness of the results. The findings reveal that FST significantly enhances circular adoption but follows a nonlinear pattern, indicating an optimal threshold beyond which excessive targets may strain resources and reduce strategic effectiveness. Eco‐innovation emerges as a key mechanism translating sustainability intent into operational circular practices, while strong governance further amplifies this effect. Heterogeneity analyses across industries, countries, and ownership structures reveal that the sustainability–circularity nexus is shaped by contextual and institutional factors. The study contributes novel empirical evidence on how strategic sustainability alignment and governance capabilities jointly determine the effectiveness of circular transformation. It offers actionable insights, urging firms to balance ambition with capacity and policymakers to strengthen ESG disclosure, incentivize innovation, and embed governance reforms that foster credible and scalable circular transitions within and beyond the BRICS economies.