Trade intensity and revealed comparative advantage: an analysis of Intra-BRICS trade

Abstract

Purpose

In the recent international scenario, the rise of emerging economies, in particular, Brazil, Russia, India, China and South Africa (BRICS) has gained ample of attention. The global trade flows of the BRICS countries have significantly increased during the last one-and-a-half decade. The purpose of this paper is to examine the intra-BRICS and BRICS–EU trade flows.

Design/methodology/approach

To study the intensity of trade among BRICS countries and with EU, the Trade Intensity Index is employed for the period 2001–2015. Balassa’s revealed comparative advantage (RCA) index is computed for the assessment of comparative advantages of exports by BRICS countries in the year 2015 in the global markets. A comparative analysis of export similarity is done for India and other BRICS countries in EU.

Findings

The findings of trade intensity showed large bilateral trade flows among BRICS member. Russia has emerged as the main trading partner with EU in BRICS. For the year 2015, the comparative study of RCA at HS-two digits and HS-four digits classification highlights marginal structural changes in the export composition of these countries. The analysis revealed that Brazil and Russia have comparative advantages in natural resource-based products, while India and China possessed comparative advantages in manufactured and processed products. The export similarity index shows the presence of competition between India and China in EU.

Practical implications

This paper highlights the need for closer cooperation to promote intra-BRICS trade and to make structural transformations in the basket of trading products by them to have trade benefits at large.

Originality/value

Numerous studies are available on bilateral trade of BRICS members. However, limited studies are available to get a holistic view of intra-BRICS trade. This paper is an attempt to examine the BRICS countries trade profile both at global levels and within the group.

Citation

Maryam, J., Banday, U.J. and Mittal, A. (2018), "Trade intensity and revealed comparative advantage: an analysis of Intra-BRICS trade", International Journal of Emerging Markets, Vol. 13 No. 5, pp. 1182-1195. https://doi.org/10.1108/IJoEM-09-2017-0365