Can International Business Perspective Measure Sustainable Development of BRICS Countries? A Panel Data Analysis

Abstract

The level of international business is highly dependent on the numerous macroeconomic and sustainable development factors that play their respective roles in defining a developing nation's economic progress. While examining the long-term growth of an economy, the consistency of the performance of the various elements in terms of their sustainability is a crucial matter to investigate. Moreover, it is known that the sustainable development of an economy is strongly associated with environmental impacts. Finally, the focus on new development patterns must be the highest concern for emerging economies. Considering this, the current study speculates on the relationship between foreign direct investment and the interaction effect of carbon emissions and poverty with control variables such as per capita income and education in BRICS economies. It concentrates on panel data ranging from 1993 to 2019 to explore the association among the said variables. It identifies the unique and definite macroeconomic parameters that are crucial for encouraging foreign direct investment in different countries. Applying the Panel Auto Regressive Distributed Lag Model, the study finds a positive interaction effect between carbon emissions and poverty that focuses on improving foreign direct investment in the long run. In the short run, an increase in per capita income always proves that BRICS will demonstrate less dependence on FDI net flows. The study also concentrates on the unit root measurement of the data by applying Panel Unit Root Test. Finally, to check the direction of causality, Pairwise Dumitrescu Hurlin Panel Causality Tests have been performed. The most recent update from these countries demonstrates that the strategy for achieving future sustainable economic growth is clear and swift. Hence, it emphasises the requirement of separate and exclusive policy-making to promote long-term sustainable economic growth in BRICS.