BRICS Nations Research Articles

Determining the role of digital technology, governance and institutions in advancing financial inclusion in BRICS nations using probit regression analysis

In the era of the industrial revolution, the world has been witnessing a histrionic turnaround owing to the consolidation of several prevalent disruptive forces, especially in the domain of technology. The present study aims at unearthing the role of information and communication technologies, institutional environment and governance characteristics in advancing financial inclusion levels in BRICS nations by extensively using the World Bank's Global Findex Database 2017. For this purpose, the study utilizes data of individual characteristics of 10,627 adult individuals in these economies, country-specific factors such as GDP per capita growth rate, digital financial services (mobile cellular subscriptions and Internet penetration), institutional environment, and governance index. It employs probit regression to achieve the same objective. The findings suggest that Internet usage and mobile penetration rates have a positive association with financial inclusion indicators in BRICS economies. In addition to governance and institutional variables, the study further discovers that individual attributes and economic conditions such as income level, age, education level, gender, and government transfers too could influence financial inclusion indicators in these countries. Hence, it hints towards the need to strike a perfect match between embracing a pro-poor growth, an inclusive financial approach, a technologically developed infrastructure, efficient legal framework and proper administration. Finally, the study advocates that such moves are not an end in themselves rather a means to shoulder the responsibility of creating a new economic order in emerging economies via financial inclusion toolbox.

Financial development, real sector and economic growth: Evidence from emerging market economies

AbstractThere is a developing concern among developed, developing, and emerging economies in relevance to increasing real sector expenditure across the world. As a result, all countries have started to increase their real sector expenditure by increasing the share of finance. Hence, this study aims to examine the effects of both financial development and real sector on economic growth; we choose five emerging market economies to explain the economic growth process between 2000 and 2016. The results of long‐run elasticities document that real sector and financial development play a significant role in promoting economic growth. The results also suggest that money supply, exchange rate and inflation have a considerable positive effect on economic growth, respectively. Given these findings, we suggest that both governments and policy makers of the BRICS nations to initiate more effective policies to increase the real sector expenditure and develop financial sector. The increasing real sector will allow the economies to grow further by ensuring sustainable economic development across the BRICS member countries.

Impact of outward FDI on home country exports

PurposeThe relationship of outward foreign direct investment (OFDI) with home country's exports has significant implications for policymakers as well as business managers of MNEs. Since BRICS nations have emerged as important sources as well as destinations of FDI, this paper aims to study the impact of OFDI from these countries on home country exports by using panel data for BRICS for time period 1993–2015.Design/methodology/approachThe author use panel unit root tests, panel cointegration, VECM and causality tests in the study.FindingsThe results reveal that OFDI has a negative and significant impact on home country exports indicating that outward FDI is a substitute for exports in these countries. It also indicates long-run causality from exports towards OFDI. There is no long-run causality running from OFDI to exports, suggesting that MNEs do not “connect” with home economies' firms through forward and backward linkages in value chain.Practical implicationsFrom the point of view of policymakers, it implies a net outflow of capital as the outflow of foreign investment would not be matched by any incremental export earnings since exports are getting substituted by production abroad. For business managers, it is indicative of a growing foreign market that warrants large scale production and justifies the high cost and risk involved in FDI as a mode of entry compared to exports.Originality/valueTo the best of authors' knowledge, this is the first attempt to deal with the relationship between home country exports and OFDI, for an important group of emerging market economies, i.e. BRICS. The understanding of this relationship allow us to identify whether factors contributing to OFDI from emerging economies are “tied” to their home economies thereby making exports necessary or are rather based on firm specific competencies which are leveraged in different locations to cater to expanding markets.

Demystifying gaps and testing for convergence in bank regulations impacting the competitive environment: a case of India and its peers in BRICS

PurposeThis study aims to demystify how the critical regulations affecting the bank competition have instituted, amended and fine-tuned over the years in India and its peers in Brazil, Russia, India, China and South Africa (BRICS). The gaps in the regulatory practices influencing bank contestability and competition in BRICS nations are identified. Also, the regulatory convergence is tested by comparing the policies embraced in India vis-à-vis its peer nations.Design/methodology/approachA methodological framework by Barth, Caprio and Levine (2013) is adopted to construct various regulatory indices. The empirical analysis is based on information available in five rounds of the bank regulation and supervision survey conducted in 2000, 2003, 2007, 2011 and 2017 by the World Bank.FindingsThe empirical findings elucidate that although bank entry regulations have been liberalized over time, the bank contestability seems to be low in the BRICS countries, especially in India. This might be due to the substantial government ownership and the presence of notional powers that are conferred to bank supervisors. On comparing the bank regulations in India vis-à-vis its peers, the author find a strong convergence in licensing requirements for entry into the banking business, foreign bank entry mode, restrictions on conglomerate formation and adoption of prompt corrective action framework.Practical implicationsThe study suggests that future policy initiatives in India need to focus on redesigning the banking structure by reducing the share of state ownership, permitting joint ventures and liberally allowing the entry of new domestic and foreign banks in the industry. In the years to come, regulators in India will continuously face the challenge of fostering bank contestability without jeopardizing bank efficiency and overall stability.Originality/valueThis study is perhaps first of its kind, which analyzes the inter-temporal changes in regulatory indicators to examine the variations in the competitive environment of the banking markets of BRICS economies in general and India in particular.

Socially responsible investing: performance evaluation of BRICS nations

PurposeThe study aims to contribute towards the sustainable development of financial systems, by testing the performance of socially responsible investing alternatives in emerging BRICS countries. The study outcomes give us an insight into viability of responsible financial decisions in contrast with the conventional style of investing.Design/methodology/approachThe authors examine the performance of socially responsible indices of BRICS nations vis-à-vis respective conventional market indices using various risk-adjusted measures and conditional volatility measures. We further segregate the 12-year study period to crisis and non-crisis period particular to the respective country, as well as a common global financial crisis period to analyze the impact of market conditions in BRICS nations and observe the performance using dummy regression analysis. Conditional volatility of the stochastic index series is measured using ARCH-GARCH analysis. Fama Decomposition Model helps rank the index performance through the sub-periods.FindingsFama Decomposition Model helps us observe that while Brazil secures a position in top rankers consistently, it is India that ranks top during crisis period. With evidence of outperformance in terms of risk-return by SRI indices of BRICS countries through the overall period as well as through different market conditions, our study contributes to the positive literature on socially responsible investing.Research limitations/implicationsThe study explores performance of SRI in BRICS and finds evidence of the sustainable investment to be non-penalizing to the investor, even as the performance trend remain distinct in the countries with same level of development. It has implications for the investors and asset managers to include responsible stocks, while for the companies and regulatory bodies to unite for better reporting and disclosures. Given the broad implications, future research is required to link the impact of various cultural, legislative and demographic factors on the level and performance of the socially responsible investment in BRICS nations.Practical implicationsThe current study evaluating and comparing performances of the socially responsible investments in BRICS nations puts forth following implications for the different sectors of the society, especially in emerging countries: (1) BRICS organization – The association of five economic giants, having significant influence over global as well as regional affairs, can aim to orient the countries' efforts towards collective sustainable development by designing uniform SRI framework. (2) Investors – In the globalization era, the investor can gain from ethical cross border investments to diversification and country benefits. (3) Companies and regulatory bodies – Only voluntary or mandatory unified efforts, to provide accurate and consistent disclosures, can upscale the mediocre growth trends of sustainable investing in emerging economies. (4) Asset Managers – Call of greater role in educating, warding off inhibitions related to RI.Originality/valueThis is to certify that the research paper submitted by us is an outcome of our independent and original work. We have duly acknowledged all the sources from which the ideas and extracts have been taken. The project is free from any plagiarism and has not been submitted elsewhere for publication.

Exploring the Tourism-Poverty Alleviation Nexus in the Brics Groupof Nations

The tourism-poverty alleviation nexus is becoming an increasingly significant subject of academic inquiry within the tourism economics discourse. Using time series data from the World Bank (1995–2017) in a P-ARDL model, the present study explores the relationship between tourism (receipts from exports, the travel subsector, hospitality and accommodation subsector) and poverty alleviation (final household consumption) with tourism arrivals as the control variable within the context of the BRICS group. The results suggest that receipts from the travel subsector and exports met the a priori expectation – positively influencing poverty alleviation within BRICS nations in the long run. Contrastingly, receipts from the hospitality and accommodation subsector did not meet the a priori expectation of a positive sign, with the results indicating statistical insignificance in the long run. However, receipts from the hospitality and accommodation were found to only influence poverty alleviation in the short run. Relatedly, the results suggest that increases in consumption associated with growth in tourism arrivals did not influence poverty in the BRICS. The results point to the heterogeneity of the influence of tourism on poverty alleviation, whereby certain dimensions of tourism contribute to poverty alleviation in the long run and others do so in the short run. Based on these findings it is recommended that BRICS countries harness their tourism potential and promote intra-BRICS tourism to maximise the positive impact of travel and tourism export receipts on household consumption, which catalyses poverty alleviation.

Exploring the Tourism-Poverty Alleviation Nexus in the Brics Groupof Nations

The tourism-poverty alleviation nexus is becoming an increasingly significant subject of academic inquiry within the tourism economics discourse. Using time series data from the World Bank (1995–2017) in a P-ARDL model, the present study explores the relationship between tourism (receipts from exports, the travel subsector, hospitality and accommodation subsector) and poverty alleviation (final household consumption) with tourism arrivals as the control variable within the context of the BRICS group. The results suggest that receipts from the travel subsector and exports met the a priori expectation – positively influencing poverty alleviation within BRICS nations in the long run. Contrastingly, receipts from the hospitality and accommodation subsector did not meet the a priori expectation of a positive sign, with the results indicating statistical insignificance in the long run. However, receipts from the hospitality and accommodation were found to only influence poverty alleviation in the short run. Relatedly, the results suggest that increases in consumption associated with growth in tourism arrivals did not influence poverty in the BRICS. The results point to the heterogeneity of the influence of tourism on poverty alleviation, whereby certain dimensions of tourism contribute to poverty alleviation in the long run and others do so in the short run. Based on these findings it is recommended that BRICS countries harness their tourism potential and promote intra-BRICS tourism to maximise the positive impact of travel and tourism export receipts on household consumption, which catalyses poverty alleviation.

Physical Rehabilitation Needs in the BRICS Nations from 1990 to 2017: Cross-National Analyses Using Data from the Global Burden of Disease Study.

Background: This study analyzes the current and evolving physical rehabilitation needs of BRICS nations (Brazil, Russian Federation, India, China, South Africa), a coalition of large emergent economies increasingly important for global health. Methods: Secondary, cross-national analyses of data on Years Lived with Disability (YLDs) were extracted from the Global Burden of Disease Study 2017. Total physical rehabilitation needs, and those stratified per major condition groups are analyzed for the year 2017 (current needs), and for every year since 1990 (evolution over time). ANOVAs are used to detect significant yearly changes. Results: Total physical rehabilitation needs have increased significantly from 1990 to 2017 in each of the BRICS nations, in every metric analyzed (YLD Counts, YLDs per 100,000 people, and percentage of YLDs relevant to physical rehabilitation; all p < 0.01). Musculoskeletal & pain conditions were leading cause of physical rehabilitation needs across the BRICS nations but to varying degrees: from 36% in South Africa to 60% in Brazil. Country-specific trends include: 25% of South African needs were from HIV-related conditions (no other BRICS nation had more than 1%); India had both absolute and relative growths of pediatric rehabilitation needs (p < 0.01); China had an exponential growth in the per-capita needs from neurological and neoplastic conditions (p < 0.01; r2 = 0.97); Brazil had a both absolute and relative growth of needs coming from musculoskeletal & pain conditions (p < 0.01); and the Russian Federation had the highest neurological rehabilitation needs per capita in 2017 (over than three times those of India, South Africa or Brazil). Conclusions: total physical rehabilitation needs have been increasing in each of the BRICS nations, both in absolute and relative values. Apart from the common growing trend, each of the BRICS nations had own patterns for the amount, typology, and evolution of their physical rehabilitation needs, which must be taken into account while planning for health and physical rehabilitation programs, policies and resources.

The U.S. Term Structure and Return Volatility in Emerging Stock Markets

This paper examines the predictive power of the U.S. term structure over return volatility in emerging stock markets. Decomposing the term structure of U.S. Treasury yields into two components, the expectations factor and the maturity premium, we show that the U.S. term structure indeed contains predictive information over emerging stock market volatility, even after controlling for country specific factors including turnover and market size. While we observe heterogeneous patterns across emerging markets in terms of their predictability with respect to the U.S. term structure, we find that the market’s expectation of future short term rates, implied by the expectations factor, serves as a stronger predictor of stock market volatility compared to the maturity premium component of the yield spread. We also find that the U.S. term structure has gained further predictive value following the global financial crisis, particularly for the BRICS nations of China, Russia, and S. Africa. Overall, our findings suggest that policymakers and investors can utilize interest rate signals from the U.S. Treasury yields to make projections over stock market volatility in their local markets, however, distinguishing between the two components of the yield curve could provide additional forecasting power depending on the country of focus.

An empirical analysis of sustainability of public debt among BRICS nations

The main objective of this paper is to verify the sustainability of public debt among Brazil, Russia, India, China and South Africa (BRICS) in a political economy framework. Annual panel data have been used for BRICS countries from World Development Indicators of World Bank for the period 1980–2017 for the analysis. Bohn's sustainability framework is used to examine the sustainability of public debt in BRICS nations and verify the influence of political economic variables such as election year, coalition dummy, ideology of the government and unemployment on public debt sustainability. The results suggest that public debt sustainability is weak for BRICS as a whole. China and India have a better public debt sustainability coefficients compared to the same for Brazil, Russia and South Africa. Structural change dummy included in the model suggests that debt sustainability is severely affected after the 2008 crisis period. Political factors have influence on debt sustainability in BRICS. Electoral cycle year and coalition dummy variables adversely affect public debt sustainability in BRICS. While centrist political ideology is found to be significant and negative, left and right ideologies are not significant for debt sustainability. Since debt sustainability is found to be weak in BRICS, countries in the region need to adopt necessary measures to improve their primary balance through appropriate fiscal and debt management. Besides, it is important for the governments to prioritize fiscal prudence irrespective of their ideologies and political compulsions.

The empirical relationship between carbon emission and energy use of BRICS nations

In literature, there has been a large number of empirical research to examine the impact of CO2 emission on economic activity popularly known as the Environmental Kuznets curve having an inverted U shape relationship. The increasing environmental problem and environmental degradation are global phenomena due to increasing economic activities. In order to verify this relationship empirically in the context of BRICS nations, the present study intends to investigate the importance of energy use in the estimation of carbon emission while controlling GDP, industry value added and trade openness using Ordinary Least Square (OLS) and Fixed Effect (FE) Models. Our findings have confirmed that the relationship between CO2 emission and GDP confirmed inverted U‐shaped of the EKC. The direction of the relationship between squared LNIVA and LNCO2P further reinforce the inverted U‐shaped EKC. The relationship between LNEU and CO2P also satisfied the inverted U‐shape of the EKC. This may be due to the practice of energy efficiency and energy conservation measures in industrial sectors in BRICS nations. However, BRICS nations should also emphasize renewables and policies need to be aligned accordingly to keep CO2 emission at a lower level so that global warming could be kept to below 1.50°C, which is the target given by Paris Agreements.

Social Realist Ontology for Analysing BRICS Educational Governance: A Higher Education Perspective

This study advocates a social realist ontological framework as an effective, analytical blueprint for identifying problems and solutions in BRICS, educational governance systems; specifically as related to the higher education domain. The methods of the study include a textual analysis and description of a social realist ontology to illustrate how it may be applied towards mapping human experiences, including our undergoing processes of educational governance and their tangible outcomes in society. The study also highlights media and scholarly texts from BRICS nations to illustrate shared, yet contextually diverse educational challenges in the tertiary system. The value of comparing contemporary BRICS-related educational challenges, within a social realist ontology, is that it was possible to identify similar and diverging mechanisms which BRICS nations applied towards solving them. The results of the study indicate that a social realist ontology is also an applicable methodology for comparing challenges in the higher education sector and diverse educational governance responses to them by BRICS nations. The study highlights that in each nation, social structures including statutory bodies, culture, including those of citizens, as well as agency, including administrators and students, equally impacts on the efficacy of educational governance and its goals. The study concludes that by highlighting the powers of culture, social structures and agency in BRICS nation’s educational governance processes, member states may effectively direct necessary human, social and financial capital where they are needed in educational systems. Further, it was found that a social realist ontology enables BRICS nation-states to compare best practices of educational governance in the higher education sphere in order to learn from each other.

Multimodal Discourse on BRICS Produced by Diverse Stakeholders: Identifying Attitudes, Cultures and Perspectives

The paper explores the conceptual vision of BRICS in the contemporary world. The study focuses on language and images that are used within BRICS-related institutional communication. We argue that the research is important because of the increasing impact of BRICS on the development of the multilateral and multipolar world. The research aims to offer preliminary considerations with regard to key topics, features and tools of multimodal discourse that comes from the BRICS nations and representatives of other international/regional organisations. This area has not been subject to academic analysis so far. This confirms the novelty of the present study.&#x0D; The research material includes 600 image-text correlated items from BRICS official sources of information and from organisation and institutions, which are not affiliated with the BRICS and refer to national or international actors. The research combined theoretical analysis of literature, empirical investigation of materials within qualitative paradigm, through content-based analysis and manual coding on thematic and pragmatic criteria.&#x0D; The findings reveal different approaches to BRICS that are introduced by different actors through specific coordination of verbal and visual tools, in explicit and implicit ways. The findings show that BRICS sources contain proportioned use of texts and photos of high-ranking official events, socio-cultural features of BRICS countries, and pictures of youth with regard to BRICS mission, values, goals, and policies. This strengthens the concept of equality and human rights provision in the modern world in general and leads to the understanding of the need to include the issues of youth rights and their equality on the BRICS agenda in an explicit way.

Digital India-Communication Policy, Issues and Challenges

Erstwhile faith and belief in media and its potential for development spurred the growth of broadcasting to its present level in India. The arrival of printing press in the early phase of European colonialization subsequently lead to print journalism that is now more than 240 years old. Its sustained growth and coexistence with the new media in digital India is contrary to developments in many other nations where erstwhile print journalism is giving way to convergent media. Reforms in the telecom sector and corresponding institutional arrangements have led to the formulation of an ambitious digital India programme. This programme focusses more on enhancing the access and equity to the rural population. The nebulous distinction between legacy media and social media has raised several issues including governance, production and consumption of content and delivery of welfare services including financial inclusion. These challenges are sought to be addressed through the digital infrastructure. Solving contemporary problems within the fragile and vulnerable social structure are daunting including the challenges posed by user generated content. The frequency of internet shutdowns across the country including conflict zones has increased. A key economic and commercial variable in Digital India is the media and entertainment (M&amp;E) industry that has taken full advantage of infrastructure b evolving newer revenue models in the over the top (OTT) platforms and smart devices. India’s communication policy in a digital context will be examined as a national case study by drawing parallels where possible with one or two other BRICS nations.

Causes of Under-5 Mortality Among Brazil, the Russian Federation, India, China, and South Africa Nations: A Comparative Study

ObjectivesThe coverage of the study extends over BRICS nations. This study aims to identify the major causes of under-5 mortality across the selected nations of Brazil, the Russian Federation, India, China, and South Africa (BRICS). MethodsSecondary data served as inputs to the survey. Relevant data were obtained from the World Bank data repository, the United Nations Development Program, and the World Health Organization’s (WHO’s) official online repository between the years 2000 and 2015. Descriptive and inferential statistical tools, such as trend analysis, analysis of variance (ANOVA), and multivariate analysis of variance (MANOVA), were used to make sense of the relationship between the macro, community, and individual level variables on under-5 mortality. ResultsThe results indicated a decreasing pattern in deaths from all the disease conditions affecting the under-5 age group for all 5 countries. ConclusionThe outcome of the study provides insights on disease transitions over time across the regions, which may have policy-related and educational implications.

A Panel Data Study to Understand the Factors Affecting HDI in BRICS Nations

In 1990 United nations started an index which is a composite statistic to understand and rank human development of a country across the world. “ The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living.” Originally HDI consists of three variables namely Mean year of schooling, GNI(PPP) and Life expectancy. In this working paper, we have tried to find the impact and interaction of various other independent indices to make the understanding of HDI more comprehensive.

The predictability of stock market volatility in emerging economies: Relative roles of local, regional, and global business cycles

AbstractThis paper explores the role of business cycle proxies, measured by the output gap at the global, regional, and local levels, as potential predictors of stock market volatility in the emerging BRICS nations. We observe that the emerging BRICS nations display a rather heterogeneous pattern when it comes to the relative role of idiosyncratic factors as a predictor of stock market volatility. While domestic output gap is found to capture significant predictive information for India and China particularly, the business cycles associated with emerging economies and the world in general are strongly important for the BRIC countries and weakly for South Africa, especially in the postglobal financial crisis era. The findings suggest that despite the increase in the financial integration of world capital markets, emerging economies can still bear significant exposures to idiosyncratic risk factors, an issue of high importance for the profitability of global diversification strategies.

Does BRICS partnership really matter in price competitiveness and external sector growth?

Purpose This paper aims to identify the impact of economic integration on trade competitiveness and demonstrate its effects on trade and investment performance of member nations. Design/methodology/approach The study compiles some price indices to provide a systematic assessment of competitiveness in the BRICS region. The panel regression framework estimates the impact of integration on trade competitiveness and the external sector performance of BRICS nations. Findings The findings of the research highlight the prospects for strong, closer and sustained integration in BRICS and, more importantly, the contribution of competitiveness to FDI receipts and export growth. Research limitations/implications The assessment of exports and investment experiences of BRICS nations, particularly China and India, provides further evidence in support of the logical design and strategic use of their foreign trade policies. Originality/value The economic partnership that wants to sustain this high road to global economic space needs strategic orientations to promote their partnership in other interest areas to make the cooperation more competitive in price terms.

The emergence of defence contractors as knowledge workers: an analysis of expansion opportunities into BRIC nations

This chapter provides an examination of the potential for US private defence firms to expand into the four BRIC nations: Brazil, Russia, India, and China. Specific attention is placed on the role of knowledge workers as a means to achieve this expansion. Furthermore, this chapter aims to identify which nation among these four presents the greatest potential for international expansion of the US private defence services industry with respect to projected economic opportunity in the defence sector as well as the operational risks and challenges of conducting business in these countries. Several key indicators of opportunity, risk, and challenge were identified, and each BRIC nations was analysed and ranked with respect to the other four on each of these defined measures. The resulting aggregate rankings conclude that India presents the greatest potential for successful globalisation of professional defence services, followed closely by China and Brazil, who have similar levels of potential but for significantly different reasons. Subsequently, Russia appears to have the least potential for international expansion in this industry according to the findings of this research.

Nonperforming Loans in BRICS Nations: Determinants and Macroeconomic Impact

The issue of Nonperforming loan is considered as a serious threat towards the banking soundness of a country. Nonperforming loans are those loans which cease to generate principle and interest and create a negative impact on the performance of banks. There are host of factors which effect nonperforming loans which include both banking and macroeconomic variables. This study tries to study the impact of macroeconomic determinants on the Nonperforming loans of BRICS countries covering the period from 2000-2016. BRICS bloc is considered for study as various previous studies shows that trading blocs also get affected by inter countries nonperforming loans issues. This study uses dynamic panel data approach for analysis using Fully Modified Ordinary least square model along with Co integration analysis and for robustness checks this model incorporates fixed and random ordinary least square method. The outcome of this paper shows that unemployment has a positive relation with nonperforming loans whereas growth and financial soundness of a country has a negative relation with nonperforming loans. Savings by household also has an inverse relation with nonperforming loans like inflation rate which shows a negative relation with default loans.