International trade, technology and labour share: a BRICS analysis.

Abstract

This research paper comprehensively analyses the complexities of international trade and technology adoption related to labour share within the BRICS nations (Brazil, Russia, India, China, and South Africa). As these diverse countries have experienced rapid trade expansion in recent decades, this study's primary question is: How does international trade and technological innovation impact the labour share of income in the BRICS countries) from 1991 to 2022? Despite the trade growth, the BRICS countries face challenges with labour share dynamics, income inequality, and high unemployment rates. The relationship between trade openness, technology innovations, and labour share in these emerging economies may show different trends than in developed countries. While trade has risen, it has not translated into equitable growth in labour income share. The random effects regression and the generalised methods of moments estimation results for 1991 - 2022 analyse labour share dynamics in BRICS countries. Trade liberalisation and technological innovations show minimal impact on labour share across the random effects models and generalised methods moments estimations, highlighting the importance of other variables, such as labour policies and skills development, to address income distribution related to labour share. These findings underwrite an understanding of how global economic factors shape income distribution in the BRICS countries. The study aligns with discussions in the Ricardian, Heckscher-Ohlin-Stolper-Samuelson theorem, which forecasts that shifts in factor demands and income distribution will increase trade and technological change.