The relationship between the derivatives market and economic growth (on the basis of the BRICS countries)

   Aim. The work aimed to study the relationship between the financial derivatives market and economic growth, as well as other macroeconomic variables using the BRICS countries (Brazil, Russia, India, China, and South Africa) as an example, including Russia, in 2020–2024.

   Objectives. The work seeks to analyze the dynamics of derivatives markets development in the BRICS countries; to study the influence of macroeconomic factors (inflation, government expenditures, trade openness) on the derivatives market; to identify differences in the nature of interaction between derivatives markets and economic growth for countries with different
income levels; to develop recommendations for improving the efficiency of using derivative instruments to stimulate economic growth.

   Methods. The author applied panel data analysis methods, including the generalized method of moments (GMM), the Hausman specification test for choosing between fixed and random effects, and the Pedroni test for identifying long-run equilibrium relationships.

   Results. A causal relationship between the derivatives market and economic growth was revealed. It was established that trade openness and government expenditures have a significant impact on the derivatives market. In high-income countries, there is a two-way correlation with economic growth, while in upper-middle-income countries, it is unidirectional. In relation to Russia, such mechanisms do not function stably, therefore the research in this field
is limited.

   Conclusion. Improvement of the accuracy of research and assessment of the impact of the derivatives market on macroeconomic variables in Russia require the development of forecast models that take into account the national economy specifics. In the future, the research will be related to the creation of models capable of taking into account the specifics of the Russian financial market and offering more effective solutions in the process of its regulation.

1. Vo D.H., Nguyen P.V., Nguyen H.M., Vo A.T., Nguyen T.C. Derivatives market and economic growth nexus: Policy implications for emerging markets. The North American Journal of Economics and Finance. 2020;54:100866. DOI: 54.10.1016/j.najef.2018.10.014

2. Şendeniz-Yüncü I., Akdeniz L., Aydoğan K. Do stock index futures affect economic growth? Evidence from 32 countries. Emerging Markets Finance and Trade. 2018;54(2):410-429. DOI: 10.1080/1540496X.2016.1247348

3. Haiss P.R., Sammer B. The impact of derivatives markets on financial integration, risk, and economic growth. SSRN Electronic Journal. 2010. DOI: 10.2139/ssrn.1720586

4. Rodrigues P., Schwarz C., Seeger N. Does the institutionalization of derivatives trading spur economic growth? SSRN Electronic Journal. 2012. DOI: 10.2139/ssrn.2014805

5. Aali-Bujari A., Venegas-Martínez F., Pérez-Lechuga G. Impact of derivatives markets on economic growth in some of the major world economies: A difference-GMM panel data estimation (2002-2014). Aestimato: The IEB International Journal of Finance. 2016;12:110-127. DOI: 10.5605/IEB.12.6

6. Moshirian F., Tian X., Zhang B., Zhang W. Stock market liberalization and innovation. Journal of Financial Economics. 2021;139(3):985-1014. DOI: 10.1016/j.jfineco.2020.08.018

7. Bazih J.H., Vanwalleghem D. Deriving value or risk? Determinants and the impact of emerging market banks’ derivative usage. Research in International Business and Finance. 2021;56:101379. DOI: 10.1016/J.RIBAF.2020.101379

8. Alshubiri F. The stock market capitalisation and financial growth nexus: An empirical study of Western European countries. Future Business Journal. 2021;7:46. DOI: 10.1186/s43093-021-00092-7

9. Kirillova O.V., Rakhmatullina L.I., Safiullin I.N. Financial market in the EAEU using national currencies of the BRICS member states. In: Valiev A.R., Ziganshin B.G., Kalimullin M.N., et al., eds. Problems of development of small and medium-sized businesses in agriculture in the context of the digital economy. Proc. 2^nd Int. sci.-pract. conf. (Kazan, May 23-24, 2024). Kazan: Kazan State Agrarian University; 2024:111-114. (In Russ.).

10. Ol’khovskaya A.N. P2P lending market in Russia. In: Sidorova O.V., Sabirova Z.E., Shayakhmetov A.M., eds. II Makhmutov readings. Modern trends of socio-economic development of the region. Proc. Int. sci.-pract. conf. (Ufa, November 11, 2022). Ufa: Mir pechati; 2023:322-327. (In Russ.). DOI: 10.24411/2411-0450-2020-10080

11. Kuzmin V.I., Bushmagin I.S. Research of economic time series with general trends based on empirical data analysis methods. Mezhdunarodnyi zhurnal gumanitarnykh i estestvennykh nauk = International Journal of Humanities and Natural Sciences. 2024;(6-1):153-158. (In Russ.). DOI: 10.24412/2500-1000-2024-6-1-153-158

12. Chaudhari D., Trivedi P. Efficacy of central bank intervention in the foreign exchange market of the BRICS countries. BRICS Journal of Economics. 2022;3(3):143-172. DOI: 10.3897/brics-econ.3.e84676