Can BRICS integration transform export structures in a fragmenting world? Foreign payment capacity and lessons for Russia
Year: 2026
Type: article
Abstract: This study investigates the contribution of deeper economic integration within the BRICS framework to export transformation in the five original BRICS economies, with particular attention to Russia, in light of global economic fragmentation. It further establishes whether a country’s foreign payment capacity (FPC), proxied by total international reserves including gold, enhances this relationship by providing financial resilience. Annual panel data for Brazil, Russia, India, China and South Africa (1998–2023) are used to create a country-specific BRICS Integration Index (BII) using entropy weighting and an export transformation index using principal component analysis. Two-way fixed-effects models with Driscoll-Kraay standard errors, supported by robustness and endogeneity tests, are employed to determine the direct effects of BRICS integration and the conditioning impact of foreign payment capacity. Empirical results reveal that stronger BRICS integration is significantly associated with higher export transformation, and the effect is larger for Russia than for the BRICS average. Moreover, the positive effect becomes more pronounced when foreign payment capacity rises, suggesting that payment resilience magnifies the trade benefits of regional cooperation. The impact is particularly strong in economies with diversified financial systems and capital markets. This research links regional integration, export upgrading and financial resilience within a single conditional framework. Because the study is limited to five large emerging economies, its implications for other South-South arrangements should be treated with caution; future work could add institutional and technological dimensions of financial resilience. This study investigates how deeper economic integration within the BRICS framework contributes to export transformation in the five original BRICS economies, with particular attention to Russia, in light of global economic fragmentation. It establishes whether foreign payment capacity (FPC), proxied by total international reserves including gold, enhances this relationship by providing financial resilience. Panel data for Brazil, Russia, India, China and South Africa (1998–2023) are used. A country-specific BRICS Integration Index (BII) is created using entropy weighting, and an export transformation index using principal component analysis. Two-way fixed-effects models with Driscoll-Kraay standard errors, supported by robustness and endogeneity tests, determine the direct effects of BRICS integration and the conditioning impact of foreign payment capacity. Results show that stronger BRICS integration is significantly associated with higher export transformation, and the effect is larger for Russia than for the BRICS average. The positive effect becomes more pronounced as foreign payment capacity rises, suggesting that payment resilience magnifies the trade benefits of regional cooperation. The impact is particularly strong in economies with diversified financial systems and capital markets. Because the study is limited to five emerging economies, its implications for other South-South arrangements should be treated with caution.
Source: Figshare
Authors: Sidra Nazir, Oleg Mariev
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7225754582
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