The impact of the productive capabilities index on the competitive advantage of BRICS exports
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Abstract
The productive capacities indicators issued by UNCTAD serve as a roadmap for enhancing foreign trade and achieving growth and sustainable development for the 194 countries included in the index. This indicator acts as a dynamic tool for countries to assess their productive capacities, improve and develop their products, and access global markets. The index includes eight sub-indicators covering (natural capital, human capital, energy, institutions, the private sector, structural transformation, transportation, and information and communication technology). The diversity of these indicators makes it a multi-dimensional tool with analytical capabilities. Accordingly, this research aims to study the productive capacity indicators and their impact on the export competitiveness of BRICS countries. The research relied on panel data from 2000 to 2022. After conducting a series of standard tests, starting with the unit root test (Levin, Lin & Chu t), the results indicated that the variables became stationary after the first difference. The Kao test results confirmed a cointegration relationship, which was then used to estimate both short-term and long-term relationships. The long-term results showed a positive relationship between the overall productive capacity index, natural capital, and information and communication technology with commodity export. Conversely, human capital, energy, transportation, and institutions had a negative relationship with export competitiveness, while there was no effect from the private sector and structural transformation. The study recommended several actions and policies to help diversify the economies of BRICS countries and develop new productive sectors to reduce reliance on traditional sectors and enhance their commodity export internationally.
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