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BRICS Journal of Economics No.2 (2021)

Linear and nonlinear linkage of conditional stochastic volatility of interbank interest rates: Empirical evidence of the BRICS countries

Zouhaier Dhifaoui, Faicel Gasmi

The purpose of this article is to detect a possible linear and nonlinear causal relationship between the conditional stochastic volatility of log return of interbank interest rates for the BRICS countries in the period from January 2015 to October 2018. To extract the volatility of the analyzed time series, we use a stochastic volatility model with moving average innovations. To test a causal relationship between the estimated stochastic volatilities, two steps are applied. First, we used the Granger causality test and a vector autoregressive model (VAR). Secondly, we applied the nonlinear Granger causality test to the raw data to explore a new nonlinear causal relationship between stochastic volatility time series, and also applied it to the residual of the VAR model to confirm the causality detected in the first step. This study demonstrates the existence of some unidirectional/bidirectional linear/nonlinear causal relationships between the studied stochastic
volatility time series.

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A comparative time series analysis of crude mortality rate in the BRICS countries

Olushina Olawale Awe, Olumide Charles Ayeni, Gbenga Peter Sanusi, Lukmon Oladele Oderinde

Proper research and analysis of mortality dynamics is essential to provide reliable economic information about any country. This paper deals with the historical comparative time series analysis of the mortality rate dynamics in the BRICS countries to determine their economic performances over the years. This article presents stochastic models based on autoregressive integrated moving average (ARIMA (p, d, q)) models of various orders with a view to identifying the optimal and comparative model for the crude death rate (CDR) in the BRICS countries. The ARIMA (p, d, q) models were formulated for the crude death rates in the BRICS countries and the overall annual crude death rate for the period 1960–2018. The optimal choice of ARIMA models of order p and q was selected for each of the series. The results indicate that the ARIMA (2, 2, 0) model was the optimal model for predicting mortality dynamics in the overall BRICS data. In addition, there was a significant decrease in trends (p-value < 2.22e-16) during the study period from 1960 to 2018. In addition, the crude death rate’s data for the BRICS countries proved to be mostly non-linear, non-seasonal and without structural breaks. Finally, the findings of this study were discussed and recognized as having relevant policy implications for forecasting, insurance planning, as well as for disaster or risk reduction in the context of unprecedented global happenings in the post-pandemic era.

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The concept of global public goods in contemporary international relations between Russia and China

Natalia Kononkova, Yulia Bulgakova, Natalia Kuznetsova, Yulia Prokhodtseva, Maria Ustiuzhanina

The research concentrates on the development of the concept of global public goods in Russia and China, while new economic grounds are emerging, including a shift to digital economy and the COVID-19 pandemic. This concept is analyzed with a special emphasis on joint Russian-Chinese projects. The analysis is supplemented by a classification based on the financing of global public goods. The findings of our research show that the vast majority of global public goods are financed by governments, even though such global threats as pandemics require donations, as well as further actions by all possible investors. According to the results, with the rapid development
of digitalization, most initiatives are aimed at encouraging the spread of digital technologies. The findings of the research suggest implications for figuring out who may have a special interest in the financial aspect of the concept of global public goods.

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Impact of a sports mega-event on the perception of the image of a tourist destination: The case of the 2018 FIFA World Cup

Yana Rozhda, Marina Sheresheva

Given a changing global context, there is a need to understand if sports mega-events that are now often hosted by the BRICS countries can serve as a tool to improve their international perception as attractive tourist destinations. The study presented in the paper analyzes the perception of Russia and host cities of the 2018 FIFA World Cup by visiting fans. The problem was examined using the available secondary data, as well as empirical data obtained in the spring of 2021 by means of semi-structured interviews and survey methods. The study confirms that hosting of a sports mega-event affects the perception of the destination by its visitors. Organizing such an event encourages people to choose a location that has not been considered before and helps to dispel negative myths and stereotypes imposed by the media. The results also confirm that attending a sports mega-event may lead to an intention to revisit its venue. The results of the study are useful to an international audience, both academics and practitioners, including policy makers.

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The effect of the quality of corporate governance on the dividend policy of companies in the BRICS countries

Maria Khamidullina, Svetlana Makarova

The article presents the results of a study aimed at determining the nature of the influence of the quality of corporate governance on the dividend policy pursued by companies in the BRICS countries. This relationship is determined based on empirical research on a sample of 122 large public corporations of the BRICS countries (based on 610 observations) for the period from 2015 to 2019. The study uses Tobit, random effects, fixed effects, and OLS. The results of this study show that the quality of corporate governance significantly negatively correlates with dividend payments of companies. This means that companies in the BRICS countries adhere to the dividend substitution model (proposed by La Porta), or, in other words, compensate for the poor quality of corporate governance with high dividend payments. Taking into account the results of the study, in the final part of the article, the main methods of improving the quality of corporate governance are proposed, which can contribute to increasing the value of companies in the BRICS countries.

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