Laying the Foundations of a BRICS Bloc: Determinants of Economic Growth: A Random Effect Model Utilizing Wallace-Hussain’s Transformation
Laying the Foundations of a BRICS Bloc: Determinants of Economic Growth: A Random Effect Model Utilizing Wallace-Hussain’s Transformation
Author: Tera Fisher
Degree: Doctor of Business Administration
Date: 2022
Institution: Saint Leo University, Florida, United States
Advisor: Zachary Alexander Smith
This doctoral dissertation examines the determinants of economic growth within the BRICS nations—Brazil, Russia, India, China, and South Africa—focusing on both exogenous and endogenous factors that may influence GDP per capita growth. The research is motivated by the observation that, although BRICS countries are increasingly integrated into the global economic system through institutional, financial, economic, and political cooperation, their economic growth has shown signs of slowdown.
The study investigates the impact of global integration variables such as trade openness and foreign direct investment (FDI) inflows, alongside domestic factors including technology absorption and human capital. To analyze the data from 2009 to 2019, the author employs a one-way random effects model with Wallace-Hussain’s transformation. This methodology allows for the identification of factors that significantly contribute to economic growth while controlling for unobserved heterogeneity across countries.
Findings indicate that, during the first decade of BRICS summits, global integration factors like trade openness and FDI did not significantly contribute to GDP per capita growth. The results suggest that endogenous factors, particularly human capital and technology absorption, may play a more crucial role in driving economic growth in these developing countries. The dissertation establishes a baseline understanding of growth determinants within BRICS and highlights the need for future research using shorter time-series panels to refine theories of global integration, especially in developing nations that follow different growth trajectories compared to developed economies.
