International Trade and Economic Growth: Evidences From The Brics

The relationship between export and import of goods and services and economic growth per capita for the BRICS countries are examined using panel unit root, panel cointegration, Granger causality test, FMOLS and DOLS. Findings show that all the three variables are cointegrated and that export of goods and services and import of goods and services Granger cause economic growth per capita in the long run. It is observed that in the long run, import of goods and services and economic growth per capita Granger cause export of goods and services while export of goods and services and economic growth per capita Granger cause import of goods and services in the long run. Additionally short run bidirectional causality is observed between export of goods and services and economic growth. The study concludes that burgeoning Gross Domestic Product (GDP) and trade of BRICS are tied in knot and thus supports export oriented policies of these nations