Trade in financial services (TIFS) has a very important role in channelling investments into most productive uses, and therefore promoting growth. This article examines the relation between TIFS and economic growth (real gross domestic product, RGDP) in BRICS economies, namely, Brazil, Russia, India, China and South Africa, for the period 1990–2012. We have used Pedroni’s panel cointegration approach to establish a long-run relationship between TIFS and economic growth. The results suggest that a causal relationship exists between the TIFS and economic growth of the BRICS economies. Given the variables are cointegrated, Granger causality analysis was undertaken using vector error correction mode (VECM) and vector autoregression (VAR) procedures, the results of which reveal both short-run and long-run uni-directional causalities running from TIFS to RGDP.

Purpose The purpose of this paper is to examine the relationship between financial development, openness in financial services trade and economic growth in BRICS countries for the period 1990–2012. Design/methodology/approach An index for financial development has been constructed using principal component analysis technique by including banking sector development, stock market development, bond market development and insurance sector development. For the robustness of the result, the long-run cointegrating relationship amongst the variables has been analyzed. Findings Overall financial development has a positive and significant impact on economic growth. To take the full advantage of openness in financial services trade, countries need to put more emphasis on the development of their stock markets, bond markets and the insurance sector. The result shows that openness in financial services trade has a positive impact on economic growth when the stock market, bond market and insurance sector are included in the system. Research limitations/implications The policy implication of the findings is that policymakers should focus more on developing all four areas of finance to get the full benefit of the financial system on the process of economic growth. Originality/value The authors have constructed the better indicators of financial development in the case of BRICS economies. Most of the studies in BRICS economies have measured the development of the financial sector as either banking sector development or stock market development. However, the present study includes all four areas of finance (banking sector development, stock market development, insurance sector development and bond market development) into account.

This study aims to measure barriers to trade in financial services1 in BRICS economies including both trade and domestic restrictions based on specific commitments made by the BRICS countries to the General Agreement on Trade in Services (GATS). We constructed indices separately for banking and insurance services and also for overall financial services. We found that in insurance services, Russia is the most open followed by China, Brazil, South Africa and India. Regarding banking services, we observed that Brazil appears to be the most open followed by China, Russia, South Africa and India. For overall financial services, the study reveals that China is the most open followed by Brazil, Russia, South Africa and India. More interestingly, on the basis of commitments, China is the most open in financial services among the BRICS countries, and India the most restricted. However, in practice, Brazil has come out to be more open in financial services among the BRICS countries followed by South Africa which is in the fourth position in term of commitments. Russia is in the third position in practice but was second in terms of commitments. Surprisingly, China, which is at the first place in terms of opening financial services on the basis of commitments, is in the fourth position on the basis of practice. India remains on the bottom both on the basis of commitments and in practice.

This article investigates the long-run relationship between openness in financial services trade (OPTIFS) and financial development in five BRICS (Brazil, Russia, India, China and South Africa) economies, for the period of 1990-2012. It is found that the variables under consideration possess a long-run relationship in the mentioned economies. Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) have been performed to find the longrun coefficient of the variables. Results from FMOLS and DOLS have confirmed that OPTIFS has a positive and significant impact on financial development. The study reveals that 1 per cent increase in trade in financial services causes 0.109 increase in total credit to private sector, which is used as a proxy for financial development, indicating that the government should try to remove barriers from trade in financial services in order to develop better financial structure, thereby promoting further growth. It is also found that some of the control variables like gross savings and gross domestic product have positive and significant impact on financial development at 5 per cent level of significance

This paper uses cointegration and vector error-correction models to analyse the causal relationship between education and development across select Indian states using annual data from 1980-81 to 2008-09. Expenditure on education per capita is used as the proxy for education, while State domestic product per capita is the proxy for development. The empirical results provide some evidence of bi-directional causality in Indian States such as Kerala, Karnataka, Andhra Pradesh, Maharashtra and Tamil Nadu. There is also evidence of causation running from per capita expenditure on education to per capita State domestic product in either the short or long run in states such as Bihar, Arunachal Pradesh, Uttar Pradesh, West Bengal, Punjab, Orissa, Madhya Pradesh, Gujarat, Rajasthan, Haryana and Punjab. Thus, there is some indication that the observed positive correlation across states between expenditure on education and growth reflects primarily the influence of government effective intervention in the education sector