The present study aims, from the World Input-Output Database (WIOD) matrices, to build an Input-Output Matrix of the BRIC (IOM-BRIC) countries (Brazil, Russia, India and China), in order to identify the degree of economic integration of the countries group, as well as interdependencies, convergences and divergences. Through the IOM-BRIC, it is possible to map the most important economic sectors, level of complementarity and global linkage of production.
The developed matrix is composed of five regions: Brazil, China, India, Russia and the rest of the world, both described in the tables respectively as BRA, CHN, IND, RUS and ROW, respectively. Each region will display purchases and sales from 56 sectors, as well as the final demand from these sectors fragmented into household spending, final consumption demand from non-profit organizations serving families (ISFLSF), government consumption, fixed capital formation and changes in inventory and valuables.
The term “BRIC”, initially created by Goldman Sachs, carried out by O'Neill (2001), where the development of the economies of Brazil, Russia, India and China was comparatively studied, with the economies of the so-called G-7. According to the author, the 4 countries had relevant characteristics that made them economically important such as extensive oil production, economic representation on their continents, high economic growth, size, population and geographical potential.
To Wilson & Purushothaman (2003), in another Goldman Sachs study, the BRIC countries would have an economic performance superior to that of most developed countries by 2050. According to Kilic & Cankaya (2020), the BRIC economies formally met in 2006 and, starting in 2009, South Africa joined the group thus composing the BRICS economies, adding an "S" to the end of the original acronym representing "South Africa". All BRICS members are growing rapidly, with exception of Russia, which was once an economic power during the period of the USSR (Kalu et. al., 2020). To Arpuv & Uzma (2020), the BRICS countries have in common the standard of living and the per capita income comparable.
This economic group formed in the early 2000s represents a great potential for change in the world economy. The BRICS together represent 40% of the world population, approximately 30% of GDP and 17% of world trade. On the other hand, the G-7 countries represent 10% of the world population, approximately 39% of GDP and 32% of world trade (Kilic & Cankaya, 2020). To Kalu et. al. (2020), all BRICS nations are G-20 countries and represent a significant part of the world's GDP. However, according to the author, these 5 countries have different cultures, different geographical and political circumstances, and even different growth rates, which can interfere with the formation of a long-term strategic alliance.
Even so, in recent years, global markets have been rapidly integrating, and this integration process has been leveraged by technological advances in the areas of finance. This allows developing markets, especially emerging markets such as the BRICS, to mature more and more and at a greater pace (Panda, Vasudevan & Panda, 2020). Thus, this group of 5 countries deserves prominence in the economic plan due to the growth potential that they present, both individually and jointly.
The BRICS group has a relevant representation in the world economy. According to Isiksal (2020), the BRICS as a whole have a powerful influence on global and regional affairs. According to the author, Brazil, Russia, China and India are members of the G-20 and have a total population of more than 3 billion people, which represents approximately 40% of the entire world population. In addition, it is estimated that the nominal GDP of these countries is US$ 18.6 trillion.
To Kalu et. al. (2020), the BRICS are among the main consumers of commodities, while they are the main recipients of global investment flows. Therefore, considering that financial development represents an important concern in the choice of investments, “international investors are especially interested in the joint movements of the BRICS stock markets with these global factors because investment opportunities, speculation and risk diversification may arise” (Kalu et. al., p. 2, 2020).
Panda, Vasudevan & Panda (2020) state that the BRICS countries are responsible for 16% of the world market capitalization, where Brazil, Russia and South Africa contribute 1% each, India contributes 3% and China has the largest contribution of 10%. Thus, the authors still mention that more than 43,000 companies are listed on the stock exchanges worldwide, where 10% are Chinese companies, 1% are Brazilian, 1% are Russian and 1% are South African. India deserves prominence for being the country that contributes the most with companies listed on the stock exchange, representing 13%, having 3% more than the United States, the second largest country with companies listed on the stock exchange, with a representation of 10% (Panda, Vasudevan & Panda, 2020).
We see in Ganda (2021) that there is a high expectation of rapid economic development compared to other emerging economies in recent decades. Due to this presented economic and financial relevance, the BRICS countries have been the subject of several studies in this area in recent years. Panda, Vasudevan & Panda (2020), Kalu et. al. (2020), Kanvinde (2020) and Hung (2020), developed studies with an emphasis on the BRICS financial and stock market. Kilic & Cankaya (2020) studied the price of oil. Ganda (2021) addressed the environmental impact of human capital in the countries of this group.
In turn, it is in Ganda (2021) that the existence of a high expectation of rapid economic development is understood, when compared to other emerging economies in recent decades. Due to this presented economic and financial relevance, the BRICS countries have been the subject of several studies in this area in recent years.
In another spectrum, in the field of the state economy, Apurv & Uzma (2020) studied the relationship between investment in infrastructure and economic growth, Evenett (2020) addressed state regulation and governance in the BRICS, while Gregory (2020) addressed political risk and financial flexibility in these countries. In fact, what seems common to the countries of the group of economies is the fact that they see themselves as future large economies, and in this sense, the objectivity of cooperation in the sectors of infrastructure and supply of raw materials overrides the low economic integration that is required as a criterion in the composition of economic blocks. Integration is more a desire that is seen in the future than a reality that is presented in the present.