Research Information System
3 rd International CEO Communication, Economics, Organization & Social Sciences Congress, Dniprodzerzhynsk, Ukraine, 24 - 25 December 2021, pp.464-470
As an element of commercial liberalization, financial liberalization began in the 1980s and globalization
accelerated. Globalization has integrated all markets in the world, and international production and foreign capital
investments have gained significant momentum. Increased foreign capital investments through multinational
corporations have created new employment opportunities and significantly affected social and economic life. For
developing countries, foreign capital investments are seen as an important factor in economic growth. Because
foreign direct investments provide capital development, increase employment and thus increase the export of
capital goods. Research examining the relationship between international trade and foreign capital investments
suggests that increasing investment will improve trade and thus positively affect economic growth. For example,
Acaravci and Akyol (2017) have identified a one-way causality relationship from import and foreign capital
investments to economic growth in Turkey for the period 1998-2015.
In this context, the relationship between international trade and foreign capital investments in BRICS (Brazil,
Russia, India, China and South Africa) countries was examined in terms of the period 1990-2019. Cd-LM
horizontal cross-section tests, Pesaran panel unit root test, Westerlund co-ordination test and Dumitrescu-Hurlin
panel causality test were used on the annual panel data. The results of the research show a long-term two-way
relationship between the variables.
Keywords: International Trade, Foreign Capital Investments, BRICS