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Brazil, Russia, India and China (BRIC Countries) Definition
BRIC is used to define the idea that by 2050 Brazil and Russia will have become the world’s dominant suppliers of raw materials while China and India will have become dominant suppliers of manufactured goods in the world. BRIC nations, which have expanded to now include South Africa, have been cited by most companies to be a source of foreign expansion opportunity because of their low labor and production costs.
Back in 1990, the percentage of GDP accounted for by BRIC countries was 11% but in 2014, this figure had exponentially risen to almost 30%. This value, however, plunged around the 2008 financial crisis.
A Little More on What is BRIC Countries
Jim O’Neil of Goldman Sachs 2001, presented the economies of BRIC countries to be the fastest growing. It is predicted that these economies will be wealthier than most of the current major ones by 2050. Goldman Sachs does not present these countries as a political alliance or a trading association, instead they are presented as having power as an economic bloc. Their leaders frequently attend summits together and act in tandem with ach others interests.
Introduction and Early Writing on BRIC
A report was written in 2001 by Jim O’Neill which stated that the GDP of BRIC nations was slated to grow more quickly than that of the G7 while the global GDP was expected to grow by 1.7% that year. This report, titled Building Better Economic BRICs, presented four scenarios for measuring and projecting GDP that was adjusted for purchasing power parity.
This scenarios showed the rise in nominal GDP assumption from the 2001 measurement in US Dollars of 8% to 14.2% which when converted to PPP rates, was from 23.3% to 27.0%
Back in 2003 another report was written and published by Goldman Sachs which was titled ‘Dreaming with BRICs: The Path to 2050.’ This report claimed that the cluster of BRIC could potentially outgrow the size of the G7 in terms of USD. This would thus lead to a change in the world’s largest economies in four decades since the current ones would no longer be the richest.
A paper was published in 2007 that was called ‘BRICs and Beyond’ and it majored on the growth potential, sustainability and the environmental impacts of the rising BRIC economies. The paper also put into consideration a Next-11 (eleven emerging economies) in relation to BRIC nations and also the overall ascendency of new global markets.
The BRIC Thesis by O’Neill has been challenged throughout the years since the economic and geopolitical climate has shifted. Arguments for this thesis include the belief that the raw materials in BRIC countries are unlimited while those criticizing it argue that they ignore the nature of fossil fuels, uranium and other heavily used resources which are finite.
However, since China has higher GDP growth and political muscle, it outshines the other BRIC members and so it’s put in another category.
References for BRIC Countries
Academic Research on BRIC Countries
- CO2 emissions, energy consumption and economic growth in BRIC countries, Pao, H. T., & Tsai, C. M. (2010). Energy policy, 38(12), 7850-7860. This is an examination of the causal relationships between pollutant emissions, energy consumption and output for a section of the BRIC nations between 1971 and 2005 with the exemption of Russia whose period extends from 1990 to 2005.
- …, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries, Pao, H. T., & Tsai, C. M. (2011). Energy, 36(1), 685-693. In this paper, the impact of economic growth and financial development on environmental decadence is addressed through the use of a panel cointergration technique from 1980-2007 and for Russia between 1992 and 2007.
- Does higher economic and financial development lead to environmental degradation: evidence from BRIC countries, Tamazian, A., Chousa, J. P., & Vadlamannati, K. C. (2009). Energy policy, 37(1), 246-253. This study investigates the existing links between economic development, environmental quality and the financial development using standard reduced-form of modelling approach and the control for unobserved heterogeneity in each country while utilizing panel data from 1992-2004.
- Determinants of outward foreign direct investment from BRIC countries: an explorative study, Holtbrügge, D., & Kreppel, H. (2012). International Journal of Emerging Markets, 7(1), 4-30. This paper presents findings which show the relevance of determinants on the industry and firm level of a country.
- Oil prices and equity returns in the BRIC countries, Bhar, R., & Nikolova, B. (2009). World Economy, 32(7), 1036-1054. In this article, the level by which returns global oil prices influence stock returns and the volatility in the equity markets of BRIC is measured and also the time-varying conditional correlation between BRIC equity returns and the oil price returns is observed.
- Business marketing in BRIC countries, Biggemann, S., & Fam, K. S. (2011). Industrial Marketing Management, 40(1), 5-7. This paper examines the increasingly significant roles played by the BRIC countries in the world economy.
- Global Stock Markets Development and Integration: with Special Reference to BRIC Countries., Chittedi, K. R. (2010). International Review of Applied Financial Issues & Economics, 2(1). This study examines the stock market integration among the BRIC economies and their integration with the stock markets of other developed countries’ stock markets such as the US and UK based on daily data from January 1998 to August 2009 which can be analyzed using various methods.
- Accounting, culture, and emerging economies: IFRS in the BRIC countries, Borker, D. R. (2012). Journal of Business & Economics Research (Online), 10(5), 313. This paper uses the Geert Hofstede work on cultural dimensions and the hypothetical derivation of related accounting values by S. J. Gray to examine the cultural derived accounting orientations of the BRIC economies.
- Perspective: Revisiting the digital divide: An analysis of mobile technology depth and service breadth in the BRIC countries, Chircu, A. M., & Mahajan, V. (2009). Journal of Product Innovation Management, 26(4), 455-466. This paper shows how different the digital divide between the developing and developed countries actually is from what was previously thought for BRIC countries based on data from 2006.
- Equity market integration between the US and BRIC countries: Evidence from unit root and cointegration test, An, L., & Brown, D. (2010). Research Journal of International Studies, 16, 15-24. In this study, the co-movements of the weekly and monthly index returns of US, Brazil, Russia, China, and India are examined from October 13, 1995 to October 13, 2009.
Market entry strategies in emerging markets: An institutional study in the BRIC countries, Holtbrügge, D., & Baron, A. (2013). Thunderbird International Business Review, 55(3), 237-252. In this article the strategically important questions of how to enter and when to enter the emerging markets are addressed.