Investigation of the effect of trade openness and financial development on economic growth in the BRICS country group using panel data analysis

The concept of economic growth and its determinants in economics have always been the subject of research by economists. Politicians aimed at maximizing social welfare and economic growth in countries in line with the various economic perspectives studied by different economic schools. Before domestic growth models, which argue that economic growth depends on internal factors, a common paradigm that accepts economic growth discipline, capital stock and total labor force as the sole factor of production has been arranged. It has been argued that with the establishment of internal growth models, human capital is the most important determinant of economic growth and positively affects economic growth by increasing the productivity of production. Since the 1980s, economists have examined how openness and financial development affect economic growth, and some empirical analyzes have been made in this regard. In this context, researching and revealing the relationship between openness and financial development and economic growth is crucial both to give ideas to politicians and to increase welfare and economic growth. This thesis covers the analysis of the relationship between openness and financial development and economic growth in the period of 2004-2019 for the BRICS (Brasil, Russia, Indıa, China and South Africa) country group by using panel data analysis method. As a result of the econometric analysis, it was revealed that the openness in the relevant period for BRICS country group was a determinant of economic growth in both the short and long term; Sufficient evidence has not been reached to show that there is a significant relationship between financial development level and economic growth. Keywords: Economic Growth, Financial Development, Openness, BRICS