Is there an export- or import-led growth in emerging countries? A case of BRICS countries

The BRICS economies could be considered a world number one trading group in one respect and emerging economies in another. The study applied both Johansen cointegration methodology for the long-run relationship and Granger causality test for the direction of causality for the period of 1979-2018. The study findings confirmed that the growth-led exports (GLE) hypothesis model is relevant for India, South Africa, and China, while exports-led growth (ELG) hypothesis model is relevant for both Brazil and Russia. The growth-led imports (GLI) hypothesis model is relevant for Brazil, India, China, and South Africa, while import-led growth (ILG) hypothesis model is relevant for Russia. Hence, based on the findings, we confirmed that trade-led growth hypothesis is valid. Finally, the results show that domestic and global demand contributes to a larger trade; countries that are labor-abundant generate employment and foster economic growth.