Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries

Governments in various countries, irrespective of the country׳s level of economic growth, seek to initiate macroeconomic policies towards achieving better economic performance in order to advance level of business activities and ultimately, ensure better quality of life for the people. To achieve t...

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Main Author: Aregbeshola R. Adewale
Format: Article
Language:English
Published: SpringerOpen 2017-12-01
Series:Future Business Journal
Online Access:http://www.sciencedirect.com/science/article/pii/S2314721017300713
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author Aregbeshola R. Adewale
author_facet Aregbeshola R. Adewale
author_sort Aregbeshola R. Adewale
collection DOAJ
description Governments in various countries, irrespective of the country׳s level of economic growth, seek to initiate macroeconomic policies towards achieving better economic performance in order to advance level of business activities and ultimately, ensure better quality of life for the people. To achieve this, various approaches and interventions are applied in the process, but the outcomes are always different. While some of these policy interventions have culminated in the desired outcomes, quite a few have faltered on the platter of ineptness. This article investigates the importance of import substitution industrialisation (ISI) on the economic performance of the countries in the group of BRICS (Brazil, Russia, India, China and South Africa). Using data from the World Bank Development Indicators from 1960 to 2016 in econometric estimations, this article argues that ISI policy helped to catalyse the industrialisation process of these five countries, with the effects being more convergent in the short run as shown by the GMM, SGMM and impulse response techniques. It is thus recommended that less developed countries should adopt this form of economic integration and home-grown ISI policy to substitute imports in the short run, and embrace liberalisation as higher level of industrialisation is achieved in the long run. Gel classification: E02, E61, E65, F15, Keywords: Import substitution industrialisation, Macroeconomic policy, Economic development, Export promotion, The group of BRICS countries, The Washington consensus
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spelling doaj.art-a6efbb3707704cc087f57fd9fc15b6b22022-12-21T18:49:11ZengSpringerOpenFuture Business Journal2314-72102017-12-0132138158Import substitution industrialisation and economic growth â Evidence from the group of BRICS countriesAregbeshola R. Adewale0Department of Business Management, College of Economic and Management Sciences, University of South Africa, UNISA 0003, Preller Street, Muckleneuk Ridge, P.O. Box 392, City of Tshwane, South AfricaGovernments in various countries, irrespective of the country׳s level of economic growth, seek to initiate macroeconomic policies towards achieving better economic performance in order to advance level of business activities and ultimately, ensure better quality of life for the people. To achieve this, various approaches and interventions are applied in the process, but the outcomes are always different. While some of these policy interventions have culminated in the desired outcomes, quite a few have faltered on the platter of ineptness. This article investigates the importance of import substitution industrialisation (ISI) on the economic performance of the countries in the group of BRICS (Brazil, Russia, India, China and South Africa). Using data from the World Bank Development Indicators from 1960 to 2016 in econometric estimations, this article argues that ISI policy helped to catalyse the industrialisation process of these five countries, with the effects being more convergent in the short run as shown by the GMM, SGMM and impulse response techniques. It is thus recommended that less developed countries should adopt this form of economic integration and home-grown ISI policy to substitute imports in the short run, and embrace liberalisation as higher level of industrialisation is achieved in the long run. Gel classification: E02, E61, E65, F15, Keywords: Import substitution industrialisation, Macroeconomic policy, Economic development, Export promotion, The group of BRICS countries, The Washington consensushttp://www.sciencedirect.com/science/article/pii/S2314721017300713
spellingShingle Aregbeshola R. Adewale
Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
Future Business Journal
title Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
title_full Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
title_fullStr Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
title_full_unstemmed Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
title_short Import substitution industrialisation and economic growth â Evidence from the group of BRICS countries
title_sort import substitution industrialisation and economic growth a evidence from the group of brics countries
url http://www.sciencedirect.com/science/article/pii/S2314721017300713
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